RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
------------------SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY-----------------
[Las Colinas Office Center-Texas]
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
SECURES REVOLVING CREDIT INDEBTEDNESS. THE INDEBTEDNESS SECURED HEREBY IS
COMPOSED OF REVOLVING CREDIT TYPE INDEBTEDNESS, THE OUTSTANDING BALANCE OF WHICH
CAN FLUCTUATE UP OR DOWN ACCORDING TO PAYMENTS MADE ON THE INDEBTEDNESS AND
SUBSEQUENT ADVANCES.
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING, made as of the 26th day of September, 1996, by CORPORATE REALTY INCOME
FUND I, L.P., Delaware limited partnership (the "Trustor"), having an office at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to XXXXX X. XXXXXX, an
individual, having an office at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Trustee"), for the benefit of FLEET BANK, NATIONAL ASSOCIATION, a national
banking association (the "Beneficiary"), having an office at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, the Trustor is the owner of the fee estate in those certain
parcels of real property described in EXHIBIT A annexed hereto (together with
the improvements now or hereafter located thereon, collectively, the
"Premises"), and desires to convey the Premises in trust, to secure, among other
obligations, a certain loan being made concurrently herewith by the Beneficiary
to the Trustor, pursuant to the terms of a Loan Agreement of even date herewith
between the Trustor and Beneficiary (as the same
FRK11626.A05
285741572
01/09/97 KDF:
may be amended or otherwise modified from time to time, the "Loan Agreement");
and
WHEREAS, the indebtedness secured hereby is evidenced by that certain
Secured Promissory Note of even date herewith in the principal amount of
$24,000,000 (as the same may be amended or otherwise modified from time to time,
the "Note") made by the Trustor to the Beneficiary, which Note provides for a
variable rate of interest.
NOW, THEREFORE,
FOR THE PURPOSE OF SECURING payment of all of the liabilities and
obligations of the Trustor to the Beneficiary evidenced by the Note, plus
interest thereon and all sums necessary to protect the Beneficiary under this
Trust Deed or under the other Security Documents (as hereinafter defined), and
all other sums due and payable under the Security Documents, and all of the
other Obligations (as hereinafter defined), the Trustor does hereby grant,
transfer, assign, bargain, sell and convey, and by these presents does hereby
irrevocably grant, transfer, assign, bargain, sell and convey, in trust, unto
Trustee, and the Trustee's successors and assigns, in trust, with power of sale
and right of entry and possession, all of the Trustor's estate, right, title and
interest in and to the Premises; and
TOGETHER with all and singular the easements, rights of way, air rights,
reservations, privileges, choses in action, options, tenements, hereditaments
and appurtenances thereunto belonging or in any way appertaining, including,
without limitation, all off-street parking rights and spaces, if any, and the
reversion and remainder of any or all of the foregoing; and all of the estate,
right, title, interest, claim or demand whatsoever of the Trustor therein and in
and to the Premises and/or the improvements thereon, and in and to all strips
and gores, and all alleys adjoining the land and in and to any land lying in the
bed of any street, road or avenue, open or proposed, in front of, or adjoining
or adjacent to the Premises, to the center line thereof, either in law or in
possession or expectancy, now or hereafter acquired;
TOGETHER with all of the right, title and interest of the Trustor in and to
(i) all buildings, vaults, and other improvements and additions thereto now
erected or hereafter constructed or placed upon the Premises or any part thereof
(the "Improvements"); (ii) to the extent permitted by law, the name or names, if
any, as may now or
- 2 -
FRK11626.A05
285741572
01/09/97 KDF:
hereafter be used for each Improvement and the good will associated therewith,
as well as the trade names of the Improvements; and (iii) all machinery,
devices, fixtures, apparatus, interior improvements, appurtenances and equipment
of every kind and nature whatsoever now or hereafter attached to or placed in or
upon the Premises or the Improvements, or any part thereof, or used or procured
for use in connection with the operation of the Premises or any business
conducted thereon (except for fixtures and personal property that are at any
time the property of Space Tenants, as defined in SECTION 1.16, or independent
contractors employed at the Premises), all of the foregoing, except as
aforesaid, hereinafter collectively called "Building Service Equipment";
TOGETHER with all the right, title and interest of the Trustor in and to
all furniture, furnishings, decorations, chattels and other personal property
now or hereafter in, on or at said Premises (except for trade fixtures and
personal property that are at any time the property of Space Tenants), all of
the foregoing, except as aforesaid, hereinafter collectively called
"Furnishings;"
TOGETHER with all right, title and interest of the Trustor in and to all
insurance or other proceeds for damage done to the Improvements, Building
Service Equipment or Furnishings and all awards heretofore made or hereafter to
be made to or for the account of the Trustor for the permanent or temporary
taking by eminent domain of the whole or any part of the Premises, the
Improvements, the Building Service Equipment and the Furnishings or any lesser
estate in, or easement appurtenant to, the Premises (including, without
limitation, any awards for change of grade of streets), all of which proceeds
and awards are hereby assigned to the Beneficiary, subject to the further
provisions of this Trust Deed;
TOGETHER with all of the rents, issues, income, revenues, royalties,
proceeds, benefits and profits of the Mortgaged Premises (as hereinafter
defined), including amounts payable under all Space Leases (as hereinafter
defined), now in effect or hereafter entered into covering any part of the
Mortgaged Premises, as well as all rights and interest of the Trustor as
landlord thereunder, all of which are hereby assigned to the Beneficiary,
subject, however, to the right of the Trustor, as licensee, to receive and use
the same unless and until an Event of Default shall occur;
- 3 -
FRK11626.A05
285741572
01/09/97 KDF:
TOGETHER with all of the records and books of account now or hereafter
maintained by the Trustor in connection with the operation of the Mortgaged
Premises;
TOGETHER with all water, water rights, shares of stock evidencing the same,
mineral rights, ditches, ditch rights, reservoirs and reservoir rights
appurtenant to, located on or used in connection with the Premises or the
Improvements, whether existing now or hereafter acquired;
TOGETHER with all deposits made with or other security given to utility
companies or governmental branches or agencies by the Trustor with respect to
the Mortgaged Premises, and all advance payments of insurance premiums made by
the Trustor with respect thereto;
TOGETHER with all licenses (including, but not limited to, any operating
licenses or similar matters), contracts, management agreements, franchise
agreements, permits, authorities or certificates required, used or useful in
connection with the use, enjoyment, occupancy, management or operation of the
Mortgaged Premises, except where the assignment or pledge of any such licenses,
permits or other rights is prohibited by applicable statute or by any applicable
issuing governmental agency; and
TOGETHER with any and all of the Trustor's rights in and to any and all
cash payments, reimbursements or other intangible rights arising in connection
with the development, operation or maintenance of the Mortgaged Premises,
including, without limitation, any tax appeal refunds, municipal reimbursements,
governmental subsidy payments and governmentally-registered credits (such as
emissions and reduction credits) (collectively, the "Payments and Intangibles");
TOGETHER with all proceeds and products of the foregoing.
All of the foregoing estates, rights, privileges, interests and franchises
hereby granted and released, assigned, transferred, set over and mortgaged, or
intended so to be, being hereinafter collectively referred to as the "Mortgaged
Premises".
TO HAVE AND TO HOLD the Mortgaged Premises, now or hereafter owned
absolutely or in fee by the Trustor, together with all rights, hereditaments and
appurtenances in any way appertaining or belonging thereto, unto the Trustee,
the successors and assigns of the Trustee, forever for the
- 4 -
FRK11626.A05
285741572
01/09/97 KDF:
uses set forth herein, in trust, to secure the payment to the Beneficiary of the
principal and of interest on the Note at the maturity thereof (whether by
acceleration or otherwise), all other sums due under the Note or under this
Trust Deed or under the Loan Agreement, the performance of all covenants and
agreements in the Security Documents and all other obligations, whereupon this
Trust Deed shall cease and be void and the Mortgaged Premises shall be released
at the cost of the Trustor.
ARTICLE I.
Certain Definitions
In addition to other definitions contained herein, the following terms
shall have the meanings set forth below, unless the context of this Trust Deed
otherwise requires:
1.1. "Affiliate" - shall mean (a) if with respect to a corporation, (i) any
officer or director thereof and any person or entity who or which is, directly
or indirectly, the legal or beneficial owner of more than ten (10%) percent of
any class of shares or other equity security of such corporation, or (ii) any
person or entity who or which, directly or indirectly, controls or is controlled
by or is under common control with such corporation and (b) if with respect to a
partnership or venture, any (i) general partner, (ii) general partner of a
general partner, (iii) partnership with a common general partner, (iv)
coventurer thereof, or (v) any person, trust, corporation, partnership, venture
or other entity who or which, directly or indirectly, controls or is controlled
by or is under common control with such partnership; and if any general partner
or general partner of a general partner or coventurer is a corporation, any
person or entity which is an Affiliate as defined in clause (a) above of such
corporation. "Controls" (including the correlative meanings of "controlled by"
and "under common control with") means effective power, directly or indirectly,
to direct or cause the direction of the management and policies of such person
or entity.
1.2. "Backlease" means a sublease to the Trustor or its Affiliate made by a
lessee under a Space Lease.
1.3. "Beneficiary" shall mean the Beneficiary herein named or at any given
time the holder or holders of this Trust Deed and the Note.
- 5 -
FRK11626.A05
285741572
01/09/97 KDF:
1.4. "Due and payable" when used with reference to the principal of, or
premium or interest on, or when referring to any and all other sums secured by
this Trust Deed or any other of the Security Documents shall mean due and
payable, whether at the monthly or other date of payment or at the date of
maturity specified in the Note, this Trust Deed or the other Security Documents;
or by acceleration or call for payment as provided in the Note, hereunder or in
the other Security Documents, or, in the case of Impositions, the last day upon
which any charge may be paid without penalty and/or interest.
1.5. "Default Rate" shall mean the Involuntary Rate (as such term is
defined in the Note).
1.6. "Event of Default" shall have the meaning assigned to such term in the
Note.
1.7. "Governmental Authorities" shall mean all federal, state, county,
municipal and local governments and all departments, commissions, boards,
bureaus and offices thereof, having or claiming jurisdiction over the Mortgaged
Premises or any part thereof.
1.8. "Impositions" shall mean all duties, taxes, water and sewer rents,
rates and charges, assessments (including, but not limited to, all assessments
for public improvements or benefit), charges for public utilities, excises,
levies, license and permit fees and other charges, ordinary or extraordinary,
whether foreseen or unforeseen, of any kind and nature whatsoever, which prior
to or during the term of this Trust Deed will have been or may be laid, levied,
assessed or imposed upon or become due and payable out of or in respect of, and
become a lien on the Premises, the Improvements, Building Service Equipment,
Furnishings or any other property or rights included in the Mortgaged Premises,
or any part thereof or appurtenances thereto, or which are levied or assessed
against the rent and income received by the Trustor from the Space Leases (as
defined in SECTION 1.15) by virtue of any present or future law, order or
ordinance of the United States of America or of any state, county or local
government or of any department, office or bureau thereof or of any other
Governmental Authority.
1.9. "Legal Requirements" shall mean all present and future laws,
ordinances, rules, regulations and requirements of all Governmental Authorities,
and all orders, rules and regulations of any national or local board
- 6 -
FRK11626.A05
285741572
01/09/97 KDF:
of fire underwriters or other body exercising similar functions, foreseen or
unforeseen, ordinary or extraordinary, which may be applicable to the Mortgaged
Premises or any part thereof, or to the sidewalks, alleyways, passageways, curbs
and vaults adjoining the same, or to the use or manner of use of any of the
foregoing, or to the owners, tenants, or occupants thereof, whether or not any
such law, ordinance, order, rule, regulation or requirement shall necessitate
structural changes or improvements or shall interfere with the use or enjoyment
of any of the foregoing, and shall also mean and include all requirements of the
policies of public liability, fire and all other insurance at any time in force
with respect to any of the foregoing.
1.10. "Obligations" shall mean the (a) aggregate unpaid principal amount
of, and accrued and unpaid interest on, the Note, plus (b) any and all
indebtedness, obligations and other liabilities of the Trustor to the
Beneficiary arising out of or in connection with or otherwise relating to the
Note, the Loan Agreement or any of the Security Documents, and/or any
agreement(s) of the Trustor with the Beneficiary pertaining thereto; in each
case whether now or hereafter existing, direct or indirect, absolute or
contingent, joint, several or independent, due or to become due, liquidated or
unliquidated, held or to be held by the Beneficiary and whether created directly
or acquired by assignment or otherwise.
1.11. "Peg Rate" - shall have the meaning assigned to such term in the
Note.
1.12. "Permitted Encumbrances" shall mean each of the exceptions to
coverage set forth in SCHEDULE B, PART I of that certain Preliminary Title
Report dated September 26, 1996, issued by Chicago Title Insurance Company, to
and accepted by the Beneficiary with respect to the Premises, and such other
items as the Beneficiary in its sole discretion, may approve in writing.
1.13. "Person" shall mean and include any individual, corporation,
partnership, unincorporated association, trust, governmental agency or authority
or other entity.
1.14. "Security Documents" shall have the meaning assigned to such term in
the Note.
1.15. "Space Lease" shall mean any and all leases, subleases, licenses,
concession agreements or any other form of agreement, however denominated
(written or verbal, now or hereafter in effect), in which the Trustor (or any
predecessor in interest as owner of the Mortgaged Premises in the case of
existing Space Leases) now or here-
- 7 -
FRK11626.A05
285741572
01/09/97 KDF:
after grants a possessory interest in and to, or the right to use and occupy the
Mortgaged Premises, or any portion thereof, and all renewals, extensions,
modifications, amendments and other agreements affecting the same.
1.16. "Space Tenant" shall mean the tenant or other user or occupant of
part or all of the Mortgaged Premises under any Space Lease.
1.17. "State" shall mean the State of Texas.
1.18. "to the best of the Trustor's knowledge" shall mean the actual
knowledge of Xxxxxx X. Xxxxxxx, Xx., after reasonable inquiry and investigation.
1.19. "Trust Deed" shall mean this instrument as originally executed or, if
hereafter amended, modified or supplemented, as so amended, modified or
supplemented.
1.20. "Trustee" shall mean the Trustee herein named or any successor
trustee designated pursuant hereto from time to time.
1.21. "Trustor" shall mean the Trustor herein named, any subsequent owner
or owners of the Mortgaged Premises, and its or their respective heirs,
executors, administrators, successors and assigns, but this provision shall not
be construed to limit the terms of SECTION 2.8 hereof.
ARTICLE II.
Particular Covenants of the Trustor
The Trustor covenants and agrees as follows:
2.1. Payment of Indebtedness. The Trustor shall duly and punctually pay to
the Beneficiary, as and when due and payable, the indebtedness evidenced by the
Note and the other Obligations secured hereby. As used in this SECTION 2.1 and
elsewhere in this Trust Deed, the term "indebtedness" shall mean and include the
principal amount of the Note together with all interest thereon, any other
payments due to the Beneficiary under the Loan Agreement and/or any of the
Security Documents, all costs of collection provided for in the Note, the Loan
Agreement or any of the Security Documents, and all other sums and charges at
any time due under or otherwise secured by this Trust Deed.
- 8 -
FRK11626.A05
285741572
01/09/97 KDF:
2.2. Warranty of Title. The Trustor warrants that, to the best of the
Trustor's knowledge (a) the Mortgaged Premises are free and clear of all liens
and encumbrances other than the Permitted Encumbrances; (b) it owns the Building
Service Equipment and Furnishings free and clear of all liens and claims other
than in favor of the Beneficiary; (c) this Trust Deed is and will remain a valid
and enforceable first lien deed of trust on the Mortgaged Premises, subject only
to the Permitted Encumbrances; and (d) the Trustor has the right and lawful
authority to mortgage and convey the Mortgaged Premises in the manner and form
herein provided. The Trustor represents and warrants to the Beneficiary, to the
best of the Trustor's knowledge, and covenants for the benefit of the
Beneficiary, as follows:
(i) that the Trustor is lawfully seized and possessed of a fee in the
Premises and that the Trustor holds good legal and marketable title thereto
and to the rest of the Mortgaged Premises, subject only to the Permitted
Encumbrances; and
(ii) that the Mortgaged Premises are now free and clear of all liens
and encumbrances whatsoever, other than the Permitted Encumbrances, that
the Trustor has good right and lawful authority to mortgage and convey the
same in the manner and form herein provided and that the Trustor will
warrant and defend title to the Mortgaged Premises against all claims and
demands whatsoever.
2.3. To Maintain Priority of Lien.
2.3.1. This Trust Deed is and will be maintained as a valid first lien deed
of trust on the Mortgaged Premises, and the Trustor will not, directly or
indirectly, create or suffer or permit to be created, or to stand against the
Mortgaged Premises or any portion thereof, or against the rents, issues and
profits therefrom, and will promptly discharge, any lien or charge prior to or
upon a parity with or junior to the lien of this Trust Deed other than the
Permitted Encumbrances; provided, however, that the Trustor shall not be
required to pay any Imposition prior to the time it shall become due and payable
subject to the provisions of SECTION 2.4.1 hereof, and nothing herein contained
shall prevent the Trustor from contesting the validity of any such Imposition in
accordance with the provisions of SECTION 2.4.4. The Trustor will keep and
maintain the Mortgaged Premises, and every part thereof, free from all liens or
lien notices, of Persons supplying
- 9 -
FRK11626.A05
285741572
01/09/97 KDF:
labor and/or materials in connection with any construction, alteration, repair,
improvement or replacement of the Improvements or of the Building Service
Equipment and Furnishings. If any such lien shall be filed against the Mortgaged
Premises, or any part thereof, the Trustor promptly shall discharge the lien of
record, by bonding or otherwise. The Trustor shall exhibit to the Beneficiary,
upon request, appropriate receipts or other satisfactory evidence of the payment
of the Impositions or any other item which may, if not paid, give rise to a lien
against the Mortgaged Premises.
2.4. To Pay Impositions.
2.4.1. The Trustor will pay or cause to be paid, as and when due and
payable, all Impositions levied upon the Mortgaged Premises or any part thereof.
However, if by law, any Imposition may at the option of the taxpayer be paid in
installments (whether or not interest shall accrue on the unpaid balance
thereof), the Trustor shall have the right to exercise such option and to pay
such Imposition, or cause it to be paid (together with any accrued interest on
the unpaid balance) in installments as they fall due and before any fine,
penalty, further interest or cost may be added thereto.
2.4.2. If an Event of Default shall occur and be continuing, then upon
demand of the Beneficiary, the Trustor shall deposit with the Beneficiary a sum
which bears the same relation to the annual insurance premiums for all insurance
required by the terms hereof and real estate taxes and assessments assessed
against the Mortgaged Premises for the insurance period or tax year then in
effect, as the case may be, as the number of months elapsed as of the date of
such demand since the last preceding installment of said premiums or taxes or
assessments shall have become due and payable bears to twelve (12). For the
purpose of this computation, the month in which such last preceding installment
of premiums or real estate taxes or assessments became due and payable and the
month in which such demand is given shall be included and deemed to have
elapsed. On the first day of the month next succeeding the month in which such
demand is given, and thereafter on the first day of each and every month during
the term of this Trust Deed, the Trustor shall deposit with the Beneficiary a
sum equal to one-twelfth of such insurance premiums and such taxes and
assessments for the then-current insurance period and tax year, so that as each
installment of such premiums and taxes and assessments shall become due and
payable, the Trustor shall have deposited with the Beneficiary a sum sufficient
- 10 -
FRK11626.A05
285741572
01/09/97 KDF:
to pay the same. All such deposits shall be received and held as part of such
deposit by the Beneficiary (all such deposits to be held in an account without
interest thereon) and shall be applied to the payment of each installment of
such premiums and taxes and assessments as they shall become due and payable.
The Beneficiary shall, upon demand, furnish evidence to the Trustor of the
making of each such payment. If the amount of such premiums and taxes and
assessments has not been definitely ascertained at the time when any such
monthly deposits are required to be made, the Trustor shall make such deposits
based upon the amount of such premiums and taxes and assessments for the
preceding year, subject to adjustment as and when the amount of such premiums
and taxes and assessments are ascertained. If at any time when any installment
of such premiums and such taxes and assessments becomes due and payable the
Trustor shall not have deposited a sum sufficient to pay the same, the Trustor
shall, within five (5) days after demand, deposit any deficiency with the
Beneficiary. Upon payment in full of the indebtedness secured by this Trust
Deed, any remaining amount on deposit with the Beneficiary shall be repaid to
the Person lawfully entitled thereto. If an Event of Default shall occur and be
continuing, the Beneficiary may, at its option, apply all or any portion of the
amounts then on deposit with the Beneficiary pursuant to this SECTION 2.4.2
first to the payment of any premiums, taxes or assessments then due, and any
remaining amounts may be applied to the payment of the indebtedness. The Trustor
shall deliver to the Beneficiary all insurance and tax bills promptly following
receipt during any period when such monthly deposits are to be made with the
Beneficiary.
2.4.3. The Trustor will pay all taxes and other governmental charges
(including, without limitation, stamp taxes), except income or franchise taxes
or similar taxes based upon or measured by income, assessed by the United States
government or any state or local governmental authority and imposed on the
Beneficiary, its successors by reason of the ownership of this Trust Deed or the
Note or the receipt of the interest or other sums payable thereunder or payable
by either the Trustor or the Beneficiary upon any increase in the indebtedness
secured hereby, or any modification, amendment, extension or consolidation of
this Trust Deed. Without limiting the foregoing and subject to the limitations
set forth above, the Trustor will also pay the whole of any tax imposed,
directly or indirectly, on this Trust Deed or the Note or the receipt of any
portion of the Indebtedness in lieu of a tax on the Mortgaged Premises or the
Improvements and Building Service Equipment, whether by reason of (a) the
passage after the date of this Trust
- 11 -
FRK11626.A05
285741572
01/09/97 KDF:
Deed of any law of the State deducting from the value of real property for the
purposes of taxation any lien thereon; (b) any change in the laws for the
taxation of Trust Deeds or debts secured by trust deeds for state or local
purposes; (c) a change in the means of collection of any such tax or otherwise;
or (d) any tax, whether or not now existing, assessed against, or withheld from,
interest or other payments made by the Trustor or assessed against this Trust
Deed and which are assessed or levied by the government of any foreign nation or
political subdivision thereof, provided such tax liability shall not result from
the ownership of this Trust Deed by a Person not a citizen of, or an entity not
formed under the laws of, the United States or any state. Within a reasonable
time after payment of any such tax or governmental charge, the Trustor will
deliver to the Beneficiary satisfactory proof of payment thereof, subject,
however, to the right of the Trustor to contest Impositions as hereinafter set
forth. If the Trustor shall fail to pay such tax or charge within fifteen (15)
days after written notice, or if under applicable law the Trustor's payment or
agreement to pay the same shall be unenforceable, the Beneficiary shall have the
right to declare the entire unpaid indebtedness and all accrued and unpaid
interest thereon due and payable on a date specified by the Beneficiary, but, in
any event, not less than thirty (30) days after written notice to the Trustor.
2.4.4. The Trustor shall have the right to contest the amount or validity,
in whole or in part, of any Imposition, or to seek a reduction in the valuation
of the Mortgaged Premises, or any part thereof, as assessed for real estate or
personal property tax purposes by appropriate proceedings diligently conducted
in good faith, but only after payment of such Imposition, unless such payment
would operate as a bar to such contest or materially adversely interfere with
the prosecution thereof, in which event the Trustor may postpone or defer
payment of such Imposition (but not the payment of any monthly deposits pursuant
to SECTION 2.4.2 hereof); and upon request by the Trustor, the Beneficiary shall
postpone or defer payment of such Imposition; provided, however, that if at any
time the Mortgaged Premises, the Building Service Equipment, the Furnishings, or
any part thereof would, in the Beneficiary's reasonable judgment, by reason of
such postponement or deferment be in imminent danger of being forfeited or lost,
or if the Beneficiary might be subjected to any civil or criminal liability or
other sanction, then the Trustor, on demand, shall immediately pay or cause to
be paid the amount so contested and unpaid, together with all interest and
penalties in connection therewith.
- 12 -
FRK11626.A05
285741572
01/09/97 KDF:
2.4.5. The certificate, advice or bill of the appropriate official
designated by law to make or issue the same or to receive payment of any
Imposition indicating the nonpayment of such Imposition shall be prima facie
evidence that such Imposition is due and payable but unpaid at the time of the
making or issuance thereof.
2.5. Insurance; Restoration Following Casualty.
2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor
shall at its own expense at all times maintain or cause to be maintained on all
of the Mortgaged Premises (a) comprehensive general liability insurance,
including umbrella liability insurance, covering all claims for bodily injury,
including death, and property damage occurring on, in or about the Mortgaged
Premises in an aggregate amount of not less than Five Million Dollars
($5,000,000) per occurrence, and a single limit of not less than Two Million
Dollars ($2,000,000) per person and per occurrence for personal injury, bodily
injury and property damage; the policy shall have no deductible or self insured
retention requirements; the policy limits of such insurance, if requested by the
Beneficiary, shall be increased from time to time to reflect what a reasonably
prudent owner or lessee of buildings or improvements similar in type and
locality to the Mortgaged Premises would carry; during any period of substantial
alterations or improvements in, on or to the Mortgaged Premises, the Trustor
will cause the comprehensive general liability insurance, including umbrella
liability insurance, endorsed to provide owners' and contractors' protective
liability coverage, including completed operations liability coverage; (b)
physical damage insurance (all risk non-reporting property insurance, including
earthquake insurance, with the Beneficiary named as loss payee), covering the
Mortgaged Premises for loss or damages resulting from the perils of fire,
lightning, earthquake, and such other risks and hazards as are provided under
the current standard "Extended Coverage Endorsement" and vandalism and malicious
mischief coverage, for the full replacement value of the Mortgaged Premises on a
stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area
identified as a flood hazard area by the Secretary of Housing and Urban
Development, flood insurance, to the extent obtainable, in an amount equal to
the lesser of the full replacement value of the Mortgaged Premises or the
maximum amount available under the Federal flood insurance program; (d) boiler
and machinery insurance covering all boilers, machinery, air conditioning,
pressure vessels, and similar type equipment commonly covered under a broad-form
boiler and machinery policy, in an amount satisfactory to
- 13 -
FRK11626.A05
285741572
01/09/97 KDF:
the Beneficiary; (e) insurance against such other risks of damage, hazards,
casualties and contingencies in such amounts as the Beneficiary shall from time
to time reasonably require, provided that insurance against such other risks,
hazards, casualties or contingencies shall then be commonly carried by prudent
owners or lessees of building or improvements in the locality similar in
character, construction, use and occupancy to the Improvements, Building Service
Equipment and Furnishings on, or constituting a part of, the Mortgaged Premises;
and (f) loss of rents/business interruption coverage in an amount sufficient to
pay all Impositions, insurance premiums, interest and principal installments and
all other amounts due under the Note and the Loan Agreement and the normal
operating expenses of the Mortgaged Premises, all for a period of one (1) year.
Furthermore, the Beneficiary reserves the right to require additional insurance
and/or higher policy limits than heretofore specified if such additional
insurance and/or higher policy limits are commercially reasonable for similar
properties, which right may be exercised by written notice to the Trustor, and,
as soon thereafter as practicable, but in any event within thirty (30) days of
the receipt thereof, the Trustor agrees to obtain insurance coverage complying
with such notice. The proceeds of all such insurance (except the insurance
specified in SECTION 2.5.1(a)) shall be paid solely to the Beneficiary and be
held, applied or disbursed by the Beneficiary as provided in SECTIONS 2.5.7 and
2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid
and enforceable policies, in form and substance as shall be required by the
Beneficiary from time to time, and issued by and distributed among insurers of
recognized responsibility having an A.M. Best's Guide of A:XII or better, a
financial size category of Class XI or above, and the total limit of liability
shall not exceed ten percent (10%) of the total policyholders' surplus. Such
insurers shall be authorized to do business in the State and in all other
respects shall be reasonably satisfactory to the Beneficiary. The originals of
all such policies, or duplicate copies or certificates thereof, shall be
delivered to the Beneficiary concurrently with the execution and delivery of
this Trust Deed. Thereafter, all renewal or replacement policies, or duplicate
copies or certificates thereof, shall be delivered to the Beneficiary not less
than fifteen (15) days prior to the expiration date of the policy or policies to
be renewed or replaced, in each case accompanied by evidence reasonably
satisfactory to the Beneficiary that all premiums currently payable with respect
- 14 -
FRK11626.A05
285741572
01/09/97 KDF:
to such policies have been paid in full by or at the direction of the Trustor.
2.5.3. All such insurance policies shall (a) except for any liability
policy required hereunder, contain a standard noncontributory form of mortgagee
clause (in favor of and entitling the Beneficiary to collect any and all
proceeds payable under such insurance), as well as a standard waiver of
subrogation endorsement, all to be in form and substance reasonably satisfactory
to the Beneficiary; (b) provide that such policies may not be cancelled or
amended without at least thirty (30) days prior written notice to the
Beneficiary; and (c) provide that no act, omission or negligence of the Trustor,
or its agents, servants or employees, or of any Space Tenant under any Space
Lease, which might otherwise result in a forfeiture of such insurance or any
part thereof, shall in any way affect the validity or enforceability of such
insurance insofar as the Beneficiary is concerned. The Trustor shall not carry
separate insurance, concurrent in kind or form or contributing in the event of
loss with any insurance required under this SECTION 2.5. All losses under such
insurance policies shall be adjusted by the Trustor in the case of any single
instance of such damage or destruction not exceeding $200,000, by the Trustor
and the Beneficiary in the case of any such single instance of damage or
destruction exceeding such amount, provided that in no event shall the Trustor
approve or consent to any final adjustment in any amount exceeding the amount
specified above in this sentence without obtaining the Beneficiary's prior
approval (which approval shall not be unreasonably withheld) of the amount of
such adjustment, and solely by the Beneficiary in the case when an Event of
Default exists and is continuing.
2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within
ninety (90) days after written demand, but in no event, except for reasonable
cause, more frequently than annually, proof of the then full replacement value
of each of the Improvements and the Building Service Equipment and Furnishings
therein, such proof to be by appraisals reasonably satisfactory in form and
substance to the Beneficiary and prepared by an appraiser (who may be an
appraiser for the insurance company insuring such property) designated and paid
for by the Trustor and approved by the Beneficiary, which approval shall not be
unreasonably withheld or delayed.
2.5.5. If the Beneficiary shall, by any means, acquire the title or estate
of the Trustor in or to any portion of the Mortgaged Premises, it shall
thereupon
- 15 -
FRK11626.A05
285741572
01/09/97 KDF:
become the sole and absolute owner of all insurance policies affecting such
portion of the Mortgaged Premises held by, or required hereunder to be delivered
to, the Beneficiary, with the sole right to collect and retain all unearned
premiums thereon; and the Trustor shall be entitled only to a credit in
reduction of the then outstanding indebtedness secured hereby in the amount of
the short rate cancellation refund, when and if received by Beneficiary. The
Trustor agrees, immediately upon demand, to execute and deliver such assignments
or other authorizations or instruments as may, in the reasonable opinion of the
Beneficiary, be reasonably necessary or desirable to effectuate any of the
provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or
Furnishings shall be damaged or destroyed, in whole or in part, by fire or other
casualty, the Trustor shall give prompt notice thereof to the Beneficiary, and,
without regard to the availability or adequacy of insurance proceeds, shall
promptly following receipt of any insurance proceeds or the date when any such
proceeds are made available to the Trustor in accordance with the terms hereof,
commence to restore, replace, rebuild or alter the same as nearly as possible to
the condition, character and value thereof existing immediately prior to such
damage or destruction. Any insurance proceeds in respect of such damage or
destruction, or any Award (as defined in SECTION 3.2) for a partial taking which
is not a substantial or total taking, as such terms are referred to in ARTICLE
III hereof, at the option of the Beneficiary, may either (i) be applied as a
prepayment of the unpaid balance of the principal of the Note and of accrued and
unpaid interest thereon and as a payment of any other sums due and owing under
the Note, the Loan Agreement and the Security Documents, or (ii) be made
available to pay or reimburse costs incurred for restoration, replacement or
rebuilding necessitated as a result of such damage or destruction, or as a
result of such taking, as the case may be, or (iii) be used for any other
purpose or object deemed appropriate by the Beneficiary in connection with the
Mortgaged Premises, provided, however, that the Beneficiary may not elect either
option (i) or (iii) above if, and for so long as all of the following conditions
(collectively, the "Insurance or Award Conditions" have been and remain
satisfied: (a) no Event of Default has occurred and is continuing or would occur
as a result of such casualty or taking and no event has occurred that with the
passage of time or the giving of notice, or both, would constitute an Event of
Default; (b) the balance of the insurance proceeds or such Award either
initially paid to the Beneficiary or deposited with the Depository (as
- 16 -
FRK11626.A05
285741572
01/09/97 KDF:
hereinafter defined) or remaining from time to time, shall be sufficient, in the
Beneficiary's reasonable judgment, to complete the restoration, replacement or
rebuilding, or the Trustor shall have deposited such sufficient funds with the
Beneficiary or the Depository; and (c) the Beneficiary determines, in its
reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan
Agreement, and taking into consideration the value of all of the Projects, as
defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt
Service Coverage Ratio (as defined in the Loan Agreement, and taking into
consideration the loss of income resulting from such damage or destruction as
projected by the Beneficiary in its reasonable discretion) is not less than
1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is
continuing that with the passage of time or the giving of notice, or both, would
constitute an Event of Default but the same has not yet matured into an Event of
Default, then, if the conditions set forth in the foregoing clauses (b) and (c)
have been or will be, in the Beneficiary's reasonable judgment, satisfied, the
Beneficiary shall not elect either option (i) or (iii) unless such event shall
have matured into an Event of Default and, unless and until such event shall
have so matured into an Event of Default or such event has been cured or shall
otherwise cease to exist, the Beneficiary (or the Depository) shall not release
any such insurance proceeds or Award and the same shall be held until an Event
of Default occurs or the Default has been cured or shall otherwise cease to
exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent
insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or
Award which are to be applied to restoration, replacement or rebuilding of the
Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of
all reasonable costs and expenses of the Beneficiary in collecting such proceeds
or Award, be applied upon satisfaction of the following provisions and
conditions:
(a) If the damage be of such nature as to require the Trustor to
construct a replacement for, or to alter in any material or substantial
way, the damaged or destroyed items, the Trustor shall, before commencing
any such work, submit copies of the plans and specifications therefor to
the Beneficiary for the Beneficiary's approval, such approval to not be
unreasonably withheld or delayed.
- 17 -
FRK11626.A05
285741572
01/09/97 KDF:
(b) If after payment or reimbursement to the Beneficiary of all costs
and expenses of the Beneficiary in collecting such insurance proceeds or
Award, the aggregate insurance proceeds or Award received by reason of any
single instance of such damage or destruction or condemnation, as the case
may be, shall be $200,000 or less such insurance proceeds or Award shall be
paid to the Trustor, which shall hold all amounts so received in trust for
application first to pay the entire cost of restoring, repairing,
rebuilding or replacing the damaged or destroyed items, before any portion
of such proceeds may be used or applied for any other purpose. If the
aggregate net insurance proceeds or Award by reason of any single instance
of such damage or destruction or condemnation, as the case may be, shall be
more than $200,000 such sums shall be held and disbursed by Fleet Bank,
National Association or, if this Trust Deed is held by another financial
institution, by such financial institution or, if this Trust Deed is not
held by a financial institution, by a financial institution selected by the
then Beneficiary (the holder of such monies, the "Depository") in
accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary shall have received as to each such disbursement a
certificate of the Trustor (i) requesting the payment of a specified amount
of such insurance or condemnation proceeds; (ii) describing in reasonable
detail the work and materials applied to the restoration, replacement or
rebuilding of the damaged, destroyed or taken Improvement, or Building
Service Equipment and/or Furnishings located therein, since the date of the
last such certificate; (iii) stating that the requested amount does not
exceed the cost of such work and materials; and (iv) stating that a request
for payment for such work and materials has not previously been made,
accompanied by:
1. a certificate of an independent engineer or architect
designated by the Trustor, who shall have been approved in writing by
the Beneficiary (such approval not to be unreasonably withheld),
stating (i) that the work and materials described in the accompanying
certificate of the Trustor were satisfactorily performed and furnished
and were necessary, appropriate or desirable to the restoration,
replacement or rebuilding
- 18 -
FRK11626.A05
285741572
01/09/97 KDF:
of the damaged, destroyed or taken Improvement, or Building Service
Equipment and/or Furnishings; (ii) that the amount specified in such
certificate of the Trustor does not exceed the reasonable cost of such
work and materials; and (iii) the additional amount, if any, required
to complete the restoration, replacement or rebuilding of the damaged,
destroyed or taken Improvement, Building Service Equipment and/or
Furnishings; and
2. evidence reasonably satisfactory to the Beneficiary (i) that
there exists no filed or recorded lien, or lien notice, or encumbrance
or charge in respect of all or any part of the Mortgaged Premises that
is prior to or on a parity with the lien of this Trust Deed, except as
may be permitted in the Permitted Encumbrances; (ii) that neither the
Mortgaged Premises nor any part thereof is subject to any recorded or
filed mechanic's, laborer's, materialman's or any similar lien,
encumbrance or charge; and (iii) that none of the Building Service
Equipment and Furnishings provided in connection with such
restoration, replacement or rebuilding is subject to any security
interest other than in favor of the Beneficiary;
Upon satisfaction of the conditions set forth herein, the Beneficiary shall
pay to the Trustor the amount of such insurance or condemnation proceeds
requested in such certificate of the Trustor or consent to the Depository's
payment thereof, as the case may be; provided, however, that in no event shall
the balance of insurance or condemnation proceeds held by the Beneficiary and
the Depository be reduced below the amount specified in such certificate of the
independent engineer or architect as the amount required to complete the
restoration, replacement or rebuilding of the damaged, destroyed or taken
Improvement, Building Service Equipment and/or Furnishings. Each such payment,
whether made by the Beneficiary or the Depository, shall be held by the Trustor
in trust and shall be used solely for the payment of the cost of the work and
materials described in the certificate of the Trustor, or if such cost or any
part thereof has theretofore been paid by the Trustor out of its own funds, then
for the reimbursement to the Trustor of any such cost or part thereof paid by
it. Any balance of insurance or condemnation proceeds held by the Beneficiary
after the completion of the restoration, replacement or
- 19 -
FRK11626.A05
285741572
01/09/97 KDF:
rebuilding and payment of all costs incurred in connection therewith, to be
evidenced by a certificate to such effect of such independent engineer or
architect delivered to the Beneficiary, shall, if no Event of Default shall have
occurred and be continuing, be released to the Person lawfully entitled thereto.
Notwithstanding the foregoing, if the Trustor needs to make deposits with or
payments to contractors prior to the work being performed, if the Beneficiary is
otherwise obligated to allow funds to be used to rebuild or restore, the
Beneficiary agrees that it will not unreasonably withhold or delay its consent
to the Trustor's request that such deposits or advances payments be allowed.
2.5.8. All proceeds of rent insurance payable as a result of the occurrence
of any fire or other casualty which affects the Mortgaged Premises, or any part
thereof, shall be paid to the Beneficiary or, if the Beneficiary is not a
financial institution, the Depository. The Beneficiary or the Depository, as the
case may be, if it shall receive such proceeds, shall hold such proceeds in
trust if permitted under law, and in an account bearing interest (payable to or
for account of the Trustor), and shall apply or cause such proceeds (including
any net interest thereon) to be applied to the payment of those items referred
to in SECTION 2.5.1(f) which become, and as they become, due and payable from
and after the date of the occurrence of such damage or loss, until the
completion of the necessary restoration or replacement by the Trustor or until
the exhaustion of such proceeds (including any interest thereon), whichever
first occurs. Upon completion of such restoration or replacement, any balance of
such rent insurance proceeds, together with the interest thereon, if any, not
theretofore applied as provided herein, in the hands of the Beneficiary or the
Depository, as the case may be, shall, provided that no Event of Default shall
have occurred and be continuing, be paid to the Person lawfully entitled
thereto.
2.5.9. Nothing in this SECTION 2.5 contained shall (i) relieve the Trustor
of its duty to repair, restore, rebuild or replace the Improvements, Building
Service Equipment and/or Furnishings following damage or destruction by fire or
other casualty or taking in the event that no Award or an inadequate Award or
that no or inadequate proceeds of insurance are available to defray the cost of
such repairing, restoring, rebuilding or replacement (provided, however, the
Trustor shall be permitted to receive the insurance proceeds upon satisfaction
of the conditions set forth herein provided, in addition, that all
- 20 -
FRK11626.A05
285741572
01/09/97 KDF:
of the Insurance or Award Conditions have been and remain satisfied), or (ii)
relieve the Trustor of its obligation to pay principal and interest and to make
all other payments required by the Note, the Loan Agreement and this Trust Deed
subsequent to the occurrence of any fire or other casualty, or taking, except
if, and to the extent that, any proceeds of rent insurance are applied by the
Beneficiary in accordance with SECTION 2.5.8 to such required payments.
2.5.10. If, while any insurance proceeds or Award is being held by the
Beneficiary or the Depository, an Event of Default shall occur and be
continuing, the Beneficiary shall be entitled to receive and apply all such
insurance proceeds or Award in reduction of the indebtedness and other
obligations secured by this Trust Deed, in such order and respective amounts, as
the Beneficiary in its discretion shall determine.
2.6. To Comply with Laws.
2.6.1. The Trustor, at its own expense, will promptly cure all violations
of law affecting the Mortgaged Premises, or any part thereof, and/or the use and
operation thereof and will promptly comply, or cause to be complied with, all
present and future Legal Requirements. However, the Trustor shall have the
right, after prior notice to the Beneficiary, to contest by appropriate legal
proceedings, diligently conducted in good faith, the validity or application of
any Legal Requirement if and so long as the Trustor shall promptly furnish to
the Beneficiary a certificate to such effect showing the steps taken to comply
with such provisions, provided that:
(a) if by the terms of any such Legal Requirement, compliance
therewith pending the prosecution of any such proceeding may be delayed
legally without incurring any lien, charge or liability of any kind against
the Mortgaged Premises, or any part thereof, and without subjecting the
Trustor or the Beneficiary to any liability, civil or criminal, for failure
so to comply therewith, the Trustor may delay compliance therewith until
the final determination of any such proceeding; and
(b) if any lien, charge or civil liability would be incurred by reason
of any such delay, the Trustor nevertheless, on the prior written consent
of the Beneficiary, such consent not to be unreasonably withheld, may
contest and delay compliance with the Legal Requirement, provided that such
delay
- 21 -
FRK11626.A05
285741572 01/09/97 KDF:
would not subject the Beneficiary to criminal liability and the Trustor (i)
furnishes to the Beneficiary security reasonably satisfactory to the
Beneficiary against loss or injury by reason of such contest or delay and
(ii) prosecutes the contest with due diligence.
2.6.2. Notwithstanding the provisions of SECTION 2.6.1, if any delay in
compliance with any Legal Requirement shall, in the reasonable judgment of the
Beneficiary, place all or any part of the Mortgaged Premises in imminent danger
of being forfeited or lost, the Trustor shall, upon written notice from the
Beneficiary, immediately comply with such Legal Requirement.
2.6.3. The Trustor will use and permit the use of the Mortgaged Premises
only in accordance with the material requirements of any applicable licenses and
permits issued by Governmental Authorities.
2.6.4. The Trustor will procure, pay for and maintain (or cause to be
procured, paid and maintained) all permits, licenses and other authorizations
required to be procured and maintained by the owners and operators of the
Mortgaged Premises for any then use of all or any part of the Mortgaged Premises
then being made and for the lawful and proper operation and maintenance thereof.
2.7. Limitation on Alterations and Demolition.
2.7.1. The Trustor shall not voluntarily demolish, replace or alter the
Mortgaged Premises, or any part thereof, or voluntarily make any addition
thereto, or voluntarily construct any additional improvements thereon, or suffer
any of the same to occur, whether structural or otherwise (collectively,
"change"), without the prior written consent of the Beneficiary, which consent
shall not be unreasonably withheld or delayed; provided, however, that if no
Event of Default is continuing and such change involves an estimated cost of
less than $100,000 and is non-structural or if no Event of Default is continuing
and such change is non-structural and is being made to prepare space for a Space
Tenant pursuant to a Space Lease entered into in accordance with the Loan
Agreement, then, in either of such events, the Beneficiary's consent shall not
be required; provided, further, however, that if any such change is required by
law, the Trustor may make such change with the prior written consent of the
Beneficiary, which consent the Beneficiary will not unreasonably withhold or
delay. As a condition to any consent under this SECTION 2.7.1, the
- 22 -
FRK11626.A05
285741572
01/09/97 KDF:
Beneficiary may require (a) that plans and specifications for the proposed work,
prepared by a reputable architect reasonably satisfactory to the Beneficiary, be
submitted to the Beneficiary for approval, and (b) that the Trustor obtain a
payment and performance bond or other security reasonably satisfactory to the
Beneficiary in form and amount reasonably satisfactory to the Beneficiary from
the contractor or subcontractor performing the work unless such work amounts to
less than $200,000 in aggregate total cost. All work performed by or on behalf
of the Trustor shall be completed with all reasonable diligence and continuity,
in a good and workmanlike manner, and in compliance with all applicable Legal
Requirements. Unless, and to the extent that, the provisions of SECTION 2.7.2 be
applicable, no Building Service Equipment or Furnishings shall be removed from
the Mortgaged Premises during the course of any such work without prior
notification to the Beneficiary and unless provision is made for return or
replacement on or prior to the completion of the work. The provisions of this
SECTION 2.7.1. shall apply to any change made or required to be made by the
Trustor in the course of complying with any other of the provisions of this
Trust Deed. A duplicate set of all plans and specifications required to be filed
with any Governmental Authority prior to, or at any time in connection with, any
such alteration, demolition or new construction shall be furnished to the
Beneficiary. The Trustor will pay on demand the reasonable expenses incurred by
the Beneficiary in the review of plans and specifications provided for in this
Trust Deed.
2.7.2. The Trustor shall have the right, at any time and from time to time,
to remove and dispose of any item of Building Service Equipment or Furnishings
which may have become obsolete or unfit for use or which is no longer useful in
the operation of the Improvements, provided that the Trustor promptly replaces
such item with other Building Service Equipment or Furnishings, free of superior
title, liens or claims (other than in favor of the Beneficiary) unless consent
of the Beneficiary is first obtained, not necessarily of the same character but
of at least equal quality, value and usefulness in connection with the operation
and maintenance of the Mortgaged Premises, provided, further, however, no
removal of any item of Building Service Equipment or Furnishings then having a
fair market value of $50,000 or more shall be made without the prior written
consent of the Beneficiary, which consent will not be unreasonably withheld or
delayed. However, if by reason of technological or other developments in the
operation and maintenance of buildings and other improvements of the general
character of the Improvements or
- 23 -
FRK11626.A05
285741572
01/09/97 KDF:
a change in the use of the Mortgaged Premises or any part thereof, no
replacement of the Building Service Equipment or Furnishings so removed would be
necessary or desirable for the proper operation or maintenance of the
Improvements, the Trustor shall not be required to replace the item so removed.
2.8. Limitation on Disposition of the Mortgaged Premises.
2.8.1. Except as expressly set forth in this Trust Deed or the Loan
Agreement (including, without limitation, Sections 5.01 and 6.21 of the Loan
Agreement), the Trustor shall not directly or indirectly sell, assign, mortgage,
alienate, pledge or otherwise transfer or further encumber the Mortgaged
Premises or any part thereof or any interest therein or in any of the rents,
profits or income generated thereby, whether voluntarily, involuntarily, by
operation of law or otherwise, or lease all or any portion thereof or an
undivided interest therein, without the prior written consent of the
Beneficiary. The foregoing events are hereinafter referred as a "Transfer". Any
transfer without prior written the consent of the Beneficiary is an Event of
Default.
2.8.2. If there shall be a violation of the terms and provisions of SECTION
2.8.1, whether by the Trustor or any other person, in addition to all other
rights and remedies available to the Beneficiary under this Trust Deed, the
Beneficiary shall have the option, by the giving of notice to the Trustor, of
declaring the entire unpaid principal balance of the Note, together with all
accrued and unpaid interest and all other sums and charges evidenced thereby or
payable pursuant to the Loan Agreement, immediately due and payable.
2.9. Maintenance of Mortgaged Premises; Covenant Against Waste; Inspection
by the Beneficiary. The Trustor will not commit or permit waste on the Mortgaged
Premises and, at its expense, will keep and maintain the Improvements, the
Building Service Equipment and Furnishings in its (or their) present state of
repair and condition, reasonable wear and tear excepted, and, if improved, in
such improved state of repair and condition, reasonable wear and tear excepted;
provided, that this shall not limit the Trustor's other obligations hereunder,
such as compliance with laws. The Trustor shall do or cause to be done all
maintenance and make or cause to be made all repairs as may be required by the
landlord under any Space Lease. The Trustor will neither do nor permit to be
done anything to the Mortgaged
- 24 -
FRK11626.A05
285741572
01/09/97 KDF:
Premises that may materially impair the value thereof or which may violate any
covenant, condition or restriction affecting the Mortgaged Premises, or any part
thereof, or which would effect any material change therein or in the condition
thereof that would increase the danger of fire or other hazard arising out of
the operation of the Mortgaged Premises. Subject to the rights of Space Tenants,
the Beneficiary, and its representatives and agents, may enter and inspect the
Mortgaged Premises at any time after reasonable notice (which may be oral)
during usual business hours, and the Trustor shall, within thirty (30) days
after demand by the Beneficiary (or immediately upon demand in case of
emergency), make such repairs, replacements, renewals or additions, or perform
such items of maintenance, to the Mortgaged Premises as the Beneficiary may
reasonably require in order to cause the Mortgaged Premises to comply with the
standards established in this SECTION 2.9.
2.10. To Furnish Certificates; Other Reporting Requirements.
2.10.1. The Trustor will, at its own expense, deliver to the Beneficiary,
within fifteen (15) days after written request, but no more frequently than once
per six (6) month period, a written statement executed by the Trustor, in
recordable form, setting forth to the best of the Trustor's knowledge, the
amount then unpaid upon the Note and secured by this Trust Deed and stating
whether any offsets or defenses exist against the indebtedness secured hereby;
and, if any such offsets or defenses are alleged to exist, then the factual
basis and amount of such claimed offsets or defenses.
2.10.2. The Trustor will, if requested by the Beneficiary, deliver to the
Beneficiary a certificate of an officer of the general partner of the Trustor or
of such general partner's general partner, to the effect that he is familiar
with this Trust Deed and the other Security Documents, has reviewed the affairs
of the Trustor, and to the best of his knowledge and belief there exists no
Event of Default and no act or event has occurred or exists which with notice or
lapse of time or both could become such an Event of Default, or if any such
event or Event of Default exists, specifying it and what action the Trustor is
taking to cause it to be remedied.
2.11. After-Acquired Property. All right, title and interest of the Trustor
in and to all improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Mortgaged Premises
- 25 -
FRK11626.A05
285741572
01/09/97 KDF:
hereafter acquired, constructed, assembled or placed on the Mortgaged Premises,
immediately upon such acquisition, construction, assembly or placement, as the
case may be, and in each such case without any further mortgage, conveyance or
assignment or other act of the Trustor, shall become subject to the lien of this
Trust Deed as fully and completely, and with the same effect, as though now
owned by the Trustor and specifically described in the granting clauses hereof;
and at any time and from time to time the Trustor, on demand, will execute,
acknowledge and deliver to the Beneficiary any and all such further assurances,
mortgages, conveyances or assignments as the Beneficiary may reasonably require
to further evidence, confirm and perfect the provisions of this SECTION 2.11.
2.12. Further Assurances. The Trustor shall, at its sole cost and without
expense to the Beneficiary, on demand, do, execute, acknowledge and deliver all
and every such further acts, deeds, conveyances, mortgages, assignments, notices
of assignment, transfers and assurances as the Beneficiary shall from time to
time reasonably require for better assuring, conveying, assigning, transferring
and confirming unto the Beneficiary the property and rights hereby mortgaged or
assigned or intended now or hereafter so to be, or which the Trustor may be or
may hereafter become bound to convey, mortgage or assign to the Beneficiary, or
for carrying out the intention or facilitating the performance of the terms of
this Trust Deed, or for filing, registering or recording this Trust Deed.
2.13. Recorded Instruments. The Trustor will promptly perform and observe,
or cause to be performed and observed, all of the terms, covenants and
conditions of all instruments of record affecting the Mortgaged Premises (other
than non-consensual encumbrances hereafter affecting the Mortgaged Premises, the
validity or enforceability of which the Trustor is contesting in accordance with
this Trust Deed) where non-compliance therewith affects the security of this
Trust Deed or imposes any duty or obligation upon the Trustor or any Space
Tenant. The Trustor shall do or cause to be done all things reasonably required
to preserve intact and unimpaired and to renew any and all rights-of-way,
easements, grants, appurtenances, privileges, licenses, franchises and other
interests and rights in favor of or constituting any portion of the Mortgaged
Premises. The Trustor will not, without the prior written consent of the
Beneficiary, which consent shall not be unreasonably withheld or delayed,
initiate, join in or consent to any private restrictive covenant or other public
or private restriction as to the use of all or any portion
- 26 -
FRK11626.A05
285741572
01/09/97 KDF:
of the Mortgaged Premises. The Trustor will, however, comply with all lawful
restrictive covenants and zoning ordinances and other public or private
restrictions affecting all or any portion of the Mortgaged Premises.
ARTICLE III.
Condemnation
3.1. Notice of Taking. The Trustor shall promptly notify the Beneficiary if
the Trustor receives notice of the institution of any proceeding or negotiations
for the taking of the Mortgaged Premises, or any part thereof, whether for
permanent or temporary use and occupancy in condemnation or by the exercise of
the power of eminent domain or by agreement of interested parties in lieu of
such condemnation (all the foregoing called a "taking"); shall keep the
Beneficiary currently advised, in detail, as to the status of such proceedings
or negotiations and will promptly give to the Beneficiary copies of all notices,
pleadings, judgments, determinations and other papers received or delivered by
the Trustor in connection with any such proceedings. The Beneficiary shall have
the right to appear and participate in such proceedings and may be represented
by counsel. The Trustor will not, without the Beneficiary's prior written
consent, which consent shall not be unreasonably withheld or delayed, enter into
any agreement for the taking of the Mortgaged Premises, or any part thereof,
with anyone authorized to acquire the Mortgaged Premises by eminent domain or in
condemnation.
3.2. Condemnation Award. If the Mortgaged Premises shall be the subject of
a taking the Beneficiary shall be entitled to and shall receive the total of
such portion of all awards made that shall be allowed to the Trustor with
respect to all the right, title and interest of the Trustor in and to the
Mortgaged Premises (the award made in any total, partial or temporary taking is
herein called the "Award"), provided that the obligations of the Trustor to
perform the terms, covenants and conditions of this Trust Deed, if any, affected
by such taking shall continue unimpaired until the actual vesting of title in
such proceeding and the actual receipt by the Beneficiary of the Trustor's share
of the entire Award resulting from such taking.
3.3. Application of Award. The Beneficiary shall have the option of
treating a total taking or a substantial
- 27 -
FRK11626.A05
285741572
01/09/97 KDF:
taking (as hereinafter defined) as an Event of Default and of accelerating the
entire indebtedness secured hereby, in which event it shall apply the Trustor's
entire Award in reduction of such indebtedness (including principal, interest
and other sums secured hereby, in such order as the Beneficiary may determine)
and shall turn over any balance remaining, if any, to the Person lawfully
entitled thereto; or if the Beneficiary shall not so elect to accelerate the
indebtedness and apply the Award thereto, then the total Award shall, regardless
of amount, be deposited with the Beneficiary or with the Depository, the Trustor
hereby agreeing to elect that such proceeds be held and disbursed by the
Depository in accordance with SECTIONS 2.5.6, 2.5.7, 2.5.8, 2.5.9 and 2.5.10
hereof for restoration required to be made by the Trustor. If there be a partial
taking, the net proceeds of the Award shall be deposited with the Beneficiary
and applied by the Beneficiary in accordance with the provisions of SECTIONS
2.5.6, 2.5.7, 2.5.9 and 2.5.10. Any Award remaining after the completion of such
restoration, replacement or rebuilding shall be applied in reduction of the
indebtedness (including principal, interest and other sums secured hereby) in
such order as the Beneficiary shall determine. A partial taking is substantial
only if it materially decreases the fair market value of the Mortgaged Premises
and the remainder of the Mortgaged Premises cannot be restored to an
economically viable whole.
3.4. Temporary Taking. If any Award payable to the Trustor on account of a
taking for temporary use or occupancy is made in a lump sum or is payable other
than in equal monthly installments, the Trustor shall pay over such Award to the
Depository and such Award shall be applied to installments of Impositions and of
principal and interest and all other charges secured by this Trust Deed or due
under the Note, the Loan Agreement, or the other Security Documents as and when
the same become due and payable. Any unapplied portion of such Award held by the
Depository when such taking ceases or expires (if no Event of Default has then
occurred and is continuing), or after the indebtedness secured by this Trust
Deed or due under the Loan and Security Documents shall have been paid in full,
shall be paid to the Person lawfully entitled thereto.
3.5. The Trustor's Obligation to Restore. If all available proceeds of the
Award are made available to the Trustor for restoration, replacement or
rebuilding pursuant hereto, the Trustor shall be obligated promptly to restore,
replace, rebuild or alter any Improvements or Building Service Equipment
affected by a taking so as to restore the
- 28 -
FRK11626.A05
285741572
01/09/97 KDF:
Mortgaged Premises to an economically viable whole, all without regard to the
adequacy of the proceeds of an Award, if any, made available to the Trustor.
ARTICLE IV.
Assignment of Space Leases, Rents, Profits
and Other Income as Further Security, Etc.
4.1. Assignment of Space Leases, Rents, Issues and Profits. Subject to the
Trustor's rights herein, including those set forth in Section 4.3.2 below, the
Trustor hereby absolutely, presently and irrevocably transfers, assigns and sets
over unto the Beneficiary all right, title and interest of the Trustor in and to
all Space Leases, if any, now or hereafter entered into with respect to all or
any part of the Mortgaged Premises, and all renewals, extensions, subleases or
assignments thereof, and all other occupancy agreements (written or oral), by
concession, license or otherwise, together with all of the rents, income,
receipts, revenues, issues and profits arising therefrom (the "Collateral").
4.2. The Trustor's Covenants Regarding Space Leases.
4.2.1. Without the prior consent and approval of the Beneficiary in each
instance, the Trustor will not (a) assign, pledge, hypothecate or otherwise
encumber any of the Space Leases or the rents, income, issue and profits of the
Mortgaged Premises; or (b) enter into any Space Leases affecting the Mortgaged
Premises or any part thereof, unless such Space Lease is expressly subordinate
to the lien of this Trust Deed and to any consolidation, extension, renewal,
recasting or refinancing hereof and the Space Lease provides, in substance, that
in the event of enforcement by the Beneficiary of the remedies provided for by
law or by this Trust Deed, each Space Tenant shall, at the option of the
Beneficiary, enter into a agreement with the Beneficiary which shall provide,
among other things, that (i) such Space Tenant shall attorn to any person
succeeding to the interest of the Trustor as a result of such enforcement and
shall recognize such successor in interest as landlord under such Space Lease
without change in the terms or other provisions thereof, (ii) such successor
shall not be bound by any payment of rent or additional rent for more than one
(1) month in advance or any amendment or modification of any such Space Lease
made
- 29 -
FRK11626.A05
285741572
01/09/97 KDF:
without the Beneficiary's written consent, and (iii) such successor shall not
disturb the possession of the Space Tenant provided certain conditions (as
determined by the Beneficiary) have been satisfied, including, without
limitation, that the Space Tenant shall not be in default under the terms of the
Space Lease; or (c) enter into any Space Leases without the prior written
consent of the Beneficiary unless permitted in Section 6.21 of the Loan
Agreement.
4.2.2. The Trustor further represents, warrants, covenants and agrees that:
(a) To the best of its knowledge, each Space Lease is (or, when
executed, will be) a valid and legally enforceable obligation of the
parties thereto, in full force and effect.
(b) With respect to each Space Lease and the Space Tenant security
deposits thereunder, any and/or all of such security deposits shall be held
as required by the Space Lease but in no event in a manner other than that
required by law.
(c) The Trustor shall, at its sole cost and expense, keep, observe,
perform and discharge, duly and punctually, all and singular the material
obligations, terms, covenants, conditions, representations and warranties
of each Space Lease on the part of the Trustor to be kept, observed,
performed and discharged.
(d) (i) Except as herein in this clause (i) expressly provided, the
Trustor shall, at its sole cost and expense, maintain the Space Leases in
full force and effect; the Trustor will not waive its rights under or
materially modify, change, supplement, alter or amend ("Change"), nor shall
the Trustor surrender (whether partial or total), terminate, cancel or
subordinate, any of the Space Leases or enter into any Backlease (whether
through an Affiliate or otherwise), and any such attempted Change,
surrender, termination, cancellation or subordination or Backlease shall be
void, unless, in each case, the prior written consent thereto of the
Beneficiary shall have been obtained. Notwithstanding the foregoing, the
Trustor may (x) terminate any Space Lease under 10,000 square feet as a
result of a default by the tenant under such Space Lease and (y) consent to
any sublease or assignment of any Space Lease under 10,000 square feet
- 30 -
FRK11626.A05
285741572
01/09/97 KDF:
provided (aa) such termination is being effected in the ordinary course of
the Trustor's business, (bb) no Event of Default then exists and no event
has occurred that with the passage of time or the giving of notice or both
would constitute an Event of Default, and (cc) the Beneficiary determines,
in its reasonable discretion, that upon the effectiveness of such
termination, assignment or sublease (i) the Loan to Value Ratio (as defined
in the Loan Agreement, and taking into consideration the value of all of
the Projects, as defined in the Loan Agreement) is not greater than 55%,
and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement,
and taking into consideration the loss of income resulting from such
termination, assignment or sublease, as projected by the Beneficiary in its
reasonable discretion) is not less than 1.40:1.0. A material Change shall
include but not be limited to any material Change in the amount or time of
payment of the rent or additional rent, the length of term or square
footage of the premises under any Space Lease or any other Change which
would materially adversely affect the Trustor's rights under the Space
Lease, or would affect the Beneficiary's rights under the Space Lease or
the value of the Space Lease as collateral security for the indebtedness.
(ii) The Trustor shall, at its sole cost and expense, enforce the
Space Leases in accordance with their terms; and shall appear in and
defend any action or proceeding arising to which it is a party under
or in any manner connected with any of the Space Leases.
(e) The Trustor shall deliver to the Beneficiary a copy of each notice
of default sent or received by it relating in any way to any Space Lease
promptly upon, but in any event within five (5) business days after, its
sending or receipt thereof.
4.3. The Trustor's Rights and Powers.
4.3.1. The Trustor hereby irrevocably, in the name of the Trustor or
otherwise, authorizes and empowers the Beneficiary, and assigns and transfers
unto the Beneficiary, and constitutes and appoints the Beneficiary its true and
lawful attorney-in-fact, coupled with an interest and as its agent, irrevocably,
with full power or substitution for it and in its name, but solely for the
following purposes: (i) to exercise and enforce every right, power, remedy,
authority, option and privilege of the
- 31 -
FRK11626.A05
285741572
01/09/97 KDF:
Trustor under the Space Leases, and as such attorney-in-fact, the Beneficiary
may subordinate, terminate, cancel or modify the Space Leases, accept the
surrender of the Space Leases, give any notice, take any action resulting in
such subordination, termination, cancellation, modification or surrender, give
any authorization, furnish any information, make any demands, execute any
instruments and take any and all other action on behalf of and in the name of
the Trustor which in the opinion of the Beneficiary may be necessary or
appropriate to be given, furnished, made, exercised or taken by the Trustor
under the Space Leases in order to comply therewith, to perform the conditions
thereof or to prevent or remedy any default by the Trustor thereunder or to
enforce any of the Trustor's rights and remedies thereunder, and (ii) to ask,
require, demand, receive and collect and give acquittances for the Income (as
hereinafter defined), and on nonpayment thereof to sue for, recover and receive
the same, and on payment thereof to give sufficient releases, receipts,
discharges and acquittances thereof; to endorse any checks or other instruments
or orders in connection therewith and to file any claims or take any action or
institute any proceedings which the Beneficiary may deem to be necessary or
advisable; provided, however, that the power provided for in this sentence may
not be exercised by the Beneficiary unless an Event of Default shall have
occurred and be continuing. "Income" shall mean all deposits, rents, issues,
profits, revenues, royalties, and other revenue producing arrangements, whether
written or oral, and all monetary benefits of, and/or derived from, and/or sums
payable under and by virtue of the Space Leases and/or the Premises.
4.3.2. So long as there shall not have occurred and then be continuing any
Event of Default and until such right of the Trustor is terminated by the
Beneficiary as provided in SECTION 4.3.3, the Beneficiary will not exercise its
rights pursuant to SECTION 4.3.1, and notwithstanding anything in Section 4.3.1
to the contrary, the Trustor shall have the right (but limited as hereinafter
provided) to exercise all of its rights under the Space Leases, including,
without limitation, to collect and receive all rents, income, receipts,
revenues, issues and profits arising therefrom, provided that the Trustor shall
at all times comply with, observe and perform, in the exercise of such right,
all of the provisions of this Trust Deed and the other Security Documents
applicable to the Space Leases; provided, further, that no action shall be taken
or failed to be taken by the Trustor which would
- 32 -
FRK11626.A05
285741572
01/09/97 KDF:
impair the Collateral or any other collateral security for the Obligations
provided for in the Security Documents.
4.3.3. The Beneficiary, upon the occurrence and during the continuance of
an Event of Default, at its option and upon written notice to the Trustor, shall
have the right to terminate the right of the Trustor to exercise its rights
under the Space Leases, and, thereupon, in addition, the Beneficiary, at any
time thereafter, at its option, shall have the complete right, power and
authority hereunder to exercise and enforce all rights, powers, remedies,
authority, options and privileges of the Trustor under the Space Leases in the
name of the Trustor or the Beneficiary, to enforce all obligations of the other
parties to the Space Leases and to exercise and enforce all of its rights and
remedies hereunder and under law not exercisable prior to an Event of Default.
4.3.4. The Trustor does hereby direct each and all of the Space Tenants
under the Space Leases and all contractual obligors of the Trustor to pay any
Income to the Beneficiary upon written demand for payment thereof by the
Beneficiary without further inquiry. It is understood and agreed, however, that
no such demand shall be made unless an Event of Default shall have occurred and
be continuing. No such Space Tenant or obligor shall be obliged to account to
the Trustor for any amounts paid to the Beneficiary by reason of any payment
made to the Beneficiary pursuant to such demand and, upon any such payment to
the Beneficiary, shall be pro tanto released from their obligations to the
Trustor with respect to such payment. Each Space Tenant shall be permitted to
rely on any communication from the Beneficiary pursuant hereto, and under no
circumstances shall such Space Tenant be obligated to the Trustor for any
payments made to the Beneficiary hereunder. Until such demand is made, the
Trustor is authorized to collect or enforce or continue collecting or enforcing
such Income in accordance with the provisions of this Trust Deed.
4.3.5. The Beneficiary shall not have any duty as to the collection or
protection of the Collateral or any income thereon or payments with respect
thereto, or as to the preservation of any rights pertaining thereto beyond the
safe custody of any thereof actually in its possession. In no instance shall the
Beneficiary be responsible to lessees for payment of interest upon, or return
of, any lease security deposits, except as provided by law or as provided in the
leases and then only if and to the extent that such deposits are received by the
Beneficiary. The Trustor hereby waives notice of acceptance hereof, and
- 33 -
FRK11626.A05
285741572
01/09/97 KDF:
except as otherwise specifically provided herein or required by provision of law
which may not be waived, hereby waives any and all notices or demands with
respect to any exercise by the Beneficiary of any rights or powers which it may
have or to which it may be entitled with respect to the Collateral.
4.3.6. The Trustor hereby irrevocably constitutes and appoints the
Beneficiary as the true and lawful attorney-in-fact of the Trustor, which
appointment is coupled with an interest, with full power of substitution, to
proceed from time to time in the Trustor's name in any statutory or
non-statutory proceeding affecting the Trustor or any Collateral, and the
Beneficiary or its nominee may (i) execute and file proof of claim for the full
amount of any Collateral and vote such claims for the full amount thereof (A)
for or against any proposal or resolution, (B) for a trustee or trustees or for
a receiver or receivers or for a committee of creditors and/or (C) for the
acceptance or rejection of any proposed arrangement, plan of reorganization,
composition or extension, and the Beneficiary or its nominee may receive any
payment or distribution and give acquittance therefor and may exchange or
release Collateral; (ii) endorse any draft or other instrument for the payment
of money, execute releases and negotiate and enter into settlements; and (iii)
execute all such other documents or instruments as may be necessary or expedient
to be executed by the Trustor for any of the purposes of this Trust Deed;
provided, however, that the power provided for in this sentence may be exercised
by the Beneficiary only while an Event of Default is continuing. The Beneficiary
shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing.
4.4. Remedies and Entry Upon Default.
4.4.1. So long as no Event of Default shall have occurred and be
continuing, the Trustor shall have the right to collect (but not more than one
(1) month in advance) and retain all of the rents, gross receipts and other
payments, if any, from the Space Leases and from the Mortgaged Premises
generally, and the Beneficiary agrees that customary initial rent payments,
security deposits and reimbursements by a Space Tenant to the Trustor on account
of alterations made by the Trustor for the benefit of the Space Tenant are
permissible advance payments by the Space Tenant.
- 34 -
FRK11626.A05
285741572
01/09/97 KDF:
4.4.2. Upon any Event of Default, the Beneficiary may, but shall not be
obligated to:
(a) terminate the rights of the Trustor referred to in SECTION 4.3
hereof and exercise all of the powers, rights and remedies provided for in
SECTION 4.3 hereof, including those to be exercised only from and after an
Event of Default;
(b) at any time and from time to time, without notice to, or assent
by, the Trustor or any other Person, but without affecting any of the
Obligations, in the name of the Trustor or in the name of the Beneficiary,
notify the account debtors and obligors on any or all of the Space Leases
to make payment and performance directly to the Beneficiary, and demand,
collect, receive, compound and give acquittance for the Space Leases or any
part thereof; extend the time of payment and performance of, compromise or
settle for cash, credit or otherwise, upon any terms and conditions, any of
the Space Leases; endorse to the order of the Beneficiary checks, drafts or
other orders or instruments for the payment of moneys payable to the
Trustor which shall be issued in respect of any of the Space Leases; file
any claims, commence, maintain or discontinue any actions, suits or other
proceedings deemed by the Beneficiary necessary or advisable for the
purpose of collecting upon or enforcing any of the Space Leases; and
execute any instrument and do all other things deemed necessary and proper
by the Beneficiary to protect and preserve and realize upon the Space
Leases and/or the other rights contemplated hereby; the Trustor hereby
irrevocably constitutes and appoints the Beneficiary as such the Trustor's
lawful attorney-in-fact, coupled with an interest, and its agent for the
foregoing purposes;
(c) demand, collect, sue for, attach, xxxx, recover, receive,
compromise and adjust, and make, execute and deliver receipts and releases
for all Income that may then be or may thereafter become due, owing or
payable with respect to the Premises or any part or parts thereof from any
present or future lessees, tenants, subtenants or occupants thereof or from
any present or future contract obligors; and/or
(d) pay, in such order as the Beneficiary in its sole discretion shall
determine, from and out of the Income collected in connection with the
Premises and/or the Collateral or any part or parts
- 35 -
FRK11626.A05
285741572
01/09/97 KDF:
thereof or from or out of any other funds (less the expense of collection,
including reasonable attorneys' fees and disbursements), any taxes,
assessments, water rates, sewer rates, or other government or other charges
levied, assessed or imposed against the Premises or any part or part
thereof, and also any and all other charges, costs and expenses which the
Beneficiary deems necessary or advisable to pay in respect of the
management or operation of the Premises, including, without limitation, the
costs of insurance policies, repairs and alterations, commissions for
renting the Premises or any part or parts thereof, legal expenses in
enforcing claims, preparing papers or procuring any other services that may
be required and any amounts payable under or pursuant to any Lease; all
amounts so paid and expended shall be payable on demand, together with
interest at the Involuntary Rate from the date incurred until paid, and be
deemed to be included within the Obligations and secured by this Trust
Deed; the provisions of this ARTICLE and the rights given to the
Beneficiary hereby shall inure to the benefit of the Beneficiary even
though the Beneficiary does not enter and take possession of the Premises;
any balance remaining after the indebtedness secured hereby and the other
obligations of the Trustor under the Loan and Security Documents shall have
been paid in full shall be turned over to the Person lawfully entitled
thereto. Neither the entry upon and taking possession of the Mortgaged
Premises, nor the collection and application of the rents, gross receipts
or other charges thereof, nor any other action taken by the Beneficiary in
connection therewith, shall cure or waive any default hereunder or waive or
modify any notice thereof or notice of acceleration of the Note theretofore
given by the Beneficiary.
4.4.3. If an Event of Default shall have occurred and be continuing, a
notice in writing by the Beneficiary to the Space Tenants under the Space Leases
advising them that the Trustor has defaulted hereunder and requesting that all
future payments of rent, additional rent or other charges under the Space Leases
be made to the Beneficiary (or its agent) shall be construed as conclusive
authority to such Space Tenants that such payments are to be made to the
Beneficiary (or its agent). Each Space Tenant shall be fully protected in making
such payments to the Beneficiary (or its agent) and be given full credit against
its obligations under the applicable Space Lease to the extent of payments made
to the Beneficiary (or its agent) pursuant to any such notice; and the Trustor
hereby
- 36 -
FRK11626.A05
285741572
01/09/97 KDF:
irrevocably constitutes and appoints the Beneficiary the attorney-in-fact and
agent of the Trustor, coupled with an interest, for the purpose of endorsing the
consent of the Trustor on any such notice.
4.5. No Obligation of Beneficiary.
4.5.1. The Beneficiary shall not be obligated to perform or discharge any
obligation of the Trustor as a result of the assignment hereby effected, and the
Trustor hereby agrees to indemnify and hold the Beneficiary harmless from and
against any and all liability, loss or damage which the Beneficiary may incur by
reason of any act of the Beneficiary under this Trust Deed, other than as a
result of the Beneficiary's willful misconduct or gross negligence and other
than as a result of the Beneficiary's misconduct or negligence after the
Beneficiary has taken possession of the Premises. Should the Beneficiary (i)
incur any such liability, loss or damage by reason of this Trust Deed and which
is covered by the foregoing indemnity, or in defense against any such claims or
demands, or (ii) perform any acts or covenants on the part of the Trustor to be
performed under the Space Leases, or (iii) pay for the account of the Trustor
(other than from Income or from funds delivered to the Beneficiary by the
Trustor to be held in Trust for such purpose), any and all sums, costs and
expenses for the discharge of taxes, assessments, water rents or other liens
against the Collateral or any part thereof, or on account of insurance premiums
or repairs, and also any amounts and expenses necessary to perform any covenants
and conditions to be performed on the part of the Trustor under the Space
Leases, the amount thereof, including costs, expenses and reasonable attorneys'
fees, together with interest thereon at the Involuntary Rate from the date such
expenses were paid by the Beneficiary to the date of payment to the Beneficiary
by the Trustor, shall be included in the Obligations secured by this Trust Deed,
and the Trustor shall reimburse the Beneficiary therefor upon demand.
4.5.2. The acceptance by the Beneficiary of this Trust Deed, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Beneficiary to appear in or defend any action or
proceeding relating to the Collateral, or to take any action hereunder or
thereunder, or to expend any money or incur any expenses or perform or discharge
any obligation, duty or liability under the Collateral.
- 37 -
FRK11626.A05
285741572
01/09/97 KDF:
ARTICLE V.
Security Agreement Under Uniform Commercial Code
5.1. This Trust Deed shall constitute a security agreement and a fixture
filing within the meaning of the Uniform Commercial Code of the State (the
"Code"), and the Beneficiary shall be deemed to be the "secured party" (as that
term is defined in the Code). The Trustor hereby grants to the Beneficiary, as
additional collateral for the obligations under the Note and the other
Obligations secured hereby, a security interest in and to all of the Mortgaged
Premises which are considered or as shall be determined to be personal property
or "fixtures" (as defined in the Code), including, without limitation, the
Building Service Equipment, the Furnishings, the Payments and Intangibles, all
books, records, licenses and certificates of the Trustor relating to the
Mortgaged Premises, together with all replacements thereof, substitutions
therefor or additions thereto (said property being sometimes hereinafter
referred to as the "Personal Property"). The Trustor agrees that a security
interest shall attach to the Personal Property for the benefit of the
Beneficiary to secure the indebtedness evidenced by the Note and the other
Obligations secured by this Trust Deed and all other sums and charges which may
become due hereunder, thereunder or under any of the other Security Documents.
The Trustor hereby authorizes the Beneficiary to file financing and continuation
statements with respect to the Personal Property without the signature of the
Trustor, if permitted by the Code. In any event the Trustor covenants to execute
such financing and continuation statements as the Beneficiary may reasonably
request. If an Event of Default shall occur and be continuing, the Beneficiary,
pursuant to the appropriate provisions of the Code, shall have the option of
proceeding as to both real and personal property in accordance with its rights
and remedies in respect of real property under this Trust Deed and the law of
the State, in which event the default provisions of the Code shall not apply.
The Trustor agrees that, in the event the Beneficiary shall elect to proceed
with respect to the Personal Property separately from the real property, unless
a greater period shall then be mandated by the Code, five (5) days notice of the
sale of the Personal Property shall be reasonable notice. The expenses of
retaking, holding, preparing for sale and selling incurred by the Beneficiary
shall be assessed against the Trustor and shall include, but not be limited to,
the reasonable legal expenses incurred by Beneficiary. The Trustor agrees that
it will not remove or permit to be removed from the Mortgaged Premises any of
the Personal
- 38 -
FRK11626.A05
285741572
01/09/97 KDF:
Property without the prior written consent of the Beneficiary except as set
forth in SECTION 2.7.2. All replacements, renewals and additions to the Personal
Property shall be and become immediately subject to the security interest of
this Trust Deed and the provisions of this ARTICLE V. The Trustor warrants and
represents that all Personal Property now is free and clear of all liens,
encumbrances or security interests other than the Permitted Encumbrances, and
that all replacements of the Personal Property, substitutions therefor or
additions thereto, unless the Beneficiary otherwise consents, will be, free and
clear of liens, encumbrances or security interests of others.
ARTICLE VI.
Events of Default and Remedies
6.1. Events of Default. The whole of the outstanding Principal Xxxxxx (as
defined in the Note) and accrued interest evidenced by the Note shall, at the
option of the Beneficiary, become due upon the happening of an Event of Default.
6.2. Remedies.
6.2.1. If an Event of Default shall occur and be continuing, the
Beneficiary, at its option, may:
(a) by notice to the Trustor, declare the entire principal amount of
the Note then outstanding and all accrued and unpaid interest thereon and
all obligations of the Trustor to the Beneficiary to be immediately due and
payable, and upon such declaration such principal and interest and all
obligations of the Trustor to the Beneficiary shall become and be
immediately due and payable, anything in the Note, the Loan Agreement or in
this Trust Deed or in any of the other Security Documents to the contrary
notwithstanding;
(b) as a matter of right and without notice to the Trustor or anyone
claiming under the Trustor, and without regard to the then value of the
Mortgaged Premises or the interest of the Trustor therein, to apply to any
court having jurisdiction to appoint a receiver or receivers of the
Mortgaged Premises, and the Trustor hereby irrevocable consents to such
appointment and waives notice of any application therefor; any such
receiver or receivers
- 39 -
FRK11626.A05
285741572
01/09/97 KDF:
shall have all the usual powers and duties of receivers in like or similar
cases and all the powers and duties of the Beneficiary in case of entry as
provided in this Trust Deed, and shall continue as such and exercise all
such powers until the later of (i) the date of confirmation of sale of the
Mortgaged Premises, (ii) the disbursement of all proceeds of the Mortgaged
Premises collected by such receiver and the payment of all expenses
incurred in connection therewith, and (iii) the termination of such
receivership with the consent of the Beneficiary or pursuant to an order by
a court of competent jurisdiction;
(c) exercise any and all remedies available to a secured party under
the UCC in such order and in such manner as the Beneficiary in its sole
discretion may determine; provided, however, that the expenses of retaking,
holding, preparing for sale or the like, shall include reasonable
attorneys' fees and other expenses of the Beneficiary and the Trustee and
be secured by this Trust Deed;
(d) bring an action in any court of competent jurisdiction to
judicially foreclose this Trust Deed or enforce any of the terms, covenants
and conditions hereof or contained in any other Security Document;
(e) require the Trustee to sell all or part of the Mortgaged Premises,
at public auction, to the highest bidder, for cash, at the county
courthouse of the county in Texas in which such Premises or any part hereof
is situated, between the hours of 10:00 o'clock a.m. and 4:00 o'clock p.m.
on the first Tuesday of any month, after giving notice of the time, place
and terms of said sale and of the property to be sold, by posting written
notice thereof at the courthouse door of the county, and filing such notice
with the County Clerk of the county in which the sale is to be made at
least twenty-one (21) days preceding the date of the sale, and if the
property to be sold is in more than one county, a notice shall be posted at
the courthouse door and filed with the County Clerk of each county in which
the property to be sold is situated. In addition, the Beneficiary shall, at
least twenty-one (21) days preceding the date of sale, serve written notice
of the proposed sale by certified mail on each debtor obligated to pay the
debt secured hereby according to the records of the Beneficiary. Service of
such notice shall be completed upon deposit of the notice, enclosed in a
postpaid wrapper, properly addressed to such debtor at the most recent
address as shown by the records of the Beneficiary, in a post office or
official depository under the care and custody of the United
- 40 -
FRK11626.A05
285741572
01/09/97 KDF:
States Postal Service. The affidavit of any person having knowledge of the
facts to the effect that such service was completed shall be prima facie
evidence of the fact of service. Any notice that is required or permitted
to be given to the Trustor may be addressed to the Trustor at the Trustor's
address as stated above. Any notice that is to be given by certified mail
to any other debtor may, if no address for such other debtor is shown by
the records of the Beneficiary, be addressed to such other debtor at the
address of the Trustor as is shown by the records of the Beneficiary.
Notwithstanding the foregoing provisions of this paragraph, notice of such
sale given in accordance with the requirements of the applicable laws of
the State of Texas in effect at the time of such sale shall constitute
sufficient notice of such sale.. The Trustee may sell all or any portion of
the Mortgaged Premises, together or in lots or parcels, and may execute and
deliver to the purchaser or purchasers of such property good and sufficient
deeds of conveyance of fee simple title with covenants of special warranty
made on behalf of the Trustor. In no event shall the Trustee be required to
exhibit, present or display at any such sale any of the personalty
described herein to be sold at such sale. The Trustee making such sale
shall receive the proceeds thereof and shall apply the same as follows: (i)
first, they shall pay the reasonable expenses and actual fees (based upon
time spent) of the Trustee; (ii) second, they shall pay, so far as may be
possible, the Obligations, discharging first that portion of the
Obligations arising under the covenants or agreements herein contained and
not evidenced by the Note; (iii) third, they shall pay the residue, if any,
to the persons legally entitled thereto. Payment of the purchase price to
the Trustee shall satisfy the obligation of the purchaser at such sale
therefor, and such purchaser shall not be responsible for the application
thereof. The sale or sales by the Trustee of less than the whole of the
Mortgaged Premises shall not exhaust the power of sale herein granted, and
the Trustee is specifically empowered to make a successive sale or sales
under such power until the whole of the Mortgaged Premises shall be sold;
and if the proceeds of such sale or sales of less than the whole of the
Mortgaged Premises shall be less than the aggregate of the Obligations and
the expenses thereof, this Trust Deed and the lien, security interest and
assignment hereof shall remain in full force and effect as to the unsold
portion of the Mortgaged Premises just as though no sale or sales had been
made; provided, however, that the Trustor shall never have any right to
require the sale or sales of less than the whole of the Mortgaged Premises,
but the Beneficiary shall have the
- 41 -
FRK11626.A05
285741572
01/09/97 KDF:
right, at its sole discretion, to request the Trustee to sell less than the
whole of the Mortgaged Premises;
(f) proceed by a suit or suits in equity or at law, whether for the
specific performance of any covenant or agreement herein contained or in
aid of the execution of any power herein granted, or for any foreclosure
hereunder or for the sale of the Mortgaged Premises under the judgment or
decree of any court or courts of competent jurisdiction; and/or
(g) exercise any or all of its other rights and remedies provided
herein, in any of the Security Documents, or other document or agreement
now or hereafter securing all or any portion of the Obligations secured
hereby, or as provided by law, in such order of priority as the Beneficiary
shall determine in its sole discretion.
6.2.2. If default is made hereunder, the holder of the Obligations or any
part thereof on which the payment is delinquent shall have the option to proceed
with foreclosure in satisfaction of such item either through judicial
proceedings or by directing the Trustee to proceed as if under a full
foreclosure, conducting the sale as herein provided without declaring the entire
Obligations due, and if sale is made because of default of an installment, or a
part of an installment, such sale may be made subject to the unmatured part of
the Obligations; and it is agreed that such sale, if so made, shall not in any
manner affect the unmatured part of the Obligations, but as to such unmatured
part this Trust Deed shall remain in full force and effect as though no sale has
been made under the provisions of this paragraph.
6.2.3. Several sales may be made hereunder without exhausting the right of
sale for any unmatured part of the Obligations. At any such sale the Trustor
hereby agrees, on its behalf and on behalf of its heirs, executors,
administrators, successors, personal representatives and assigns, that any and
all recitals made in any deed of conveyance given by the Trustee with respect to
the identity of the Beneficiary, the occurrence or existence of any default, the
acceleration of the maturity of any of the Obligations, the request to sell, the
notice of sale, the giving of notice to all debtors legally entitled thereto,
the time, place, terms, and manner of sale, and receipt, distribution and
application of the money realized therefrom, or the due and proper appointment
of any substitute trustee, and without being limited by the foregoing, with
respect to any other act or thing having
- 42 -
FRK11626.A05
285741572
01/09/97 KDF:
been duly done by the Beneficiary or by the Trustee hereunder, shall be taken by
all courts of law and equity as prima facie evidence that the statements or
recitals state facts and are without further question to be so accepted, and the
Trustor xxxxxx xxxxxxxx and confirms every act that the Trustee or any
substitute the trustee hereunder may lawfully do in the premises by virtue
hereof. The Beneficiary may bid and become the purchaser of all or any part of
the Mortgaged Premises at any the trustee's or foreclosure sale hereunder, and
the amount of the Beneficiary's successful bid may be credited on the
Obligations.
6.2.4. This Trust Deed is granted upon this express condition, that if the
Trustor, or its successors or assigns, shall pay or cause to be paid to the
Beneficiary or its successors or assigns all of the Obligations secured hereby,
in accordance with their terms, and shall well and truly comply with each and
every covenant and condition set forth in this Trust Deed, in the Note, and in
the Security Documents, then, except for the covenants, agreements,
indemnifications and warranties, if any, in this Trust Deed which expressly
survive the release hereof, the Premises shall be released from the lien of this
Trust Deed at the cost of the Trustor. Otherwise, this Trust Deed shall remain
in full force and effect. Upon the occurrence of any Event of Default under the
Loan Agreement, including but not limited to any breach of the covenants and
agreements of, and conditions imposed upon, the Trustor contained herein and in
the Note, the Loan Agreement, and the other instruments and agreements
evidencing or securing the Obligations secured hereby, which breach remains
uncured beyond the grace period, if any, provided herein or therein, or in the
Loan Agreement, the Beneficiary may proceed to protect and enforce its rights
hereunder and under the Note and the other Security Documents by foreclosure
proceedings, or by other suit in equity, action at law, or other appropriate
proceedings, including actions for the specific performance of any covenant or
agreement contained in this Trust Deed or in the Note, or in the other Security
Documents, or in aid of the exercise of any power granted in this Trust Deed,
the Note, or in said Security Documents, or may proceed in any other legal or
equitable right of the Beneficiary and of the holder of the Note.
6.3. Sale; No Marshalling of Assets.
6.3.1. In case of a foreclosure sale, all of the Mortgaged Premises may be
sold in one parcel even though the proceeds of such sale exceed or may exceed
the
- 43 -
FRK11626.A05
285741572
01/09/97 KDF:
indebtedness secured hereby. The Beneficiary shall not be required to exercise
any rights under this Trust Deed before proceeding against any other security,
shall not be required to proceed against other security before proceeding under
this Trust Deed, and shall not be precluded from proceeding against any or all
of any security held by the Beneficiary for any or all of the indebtedness
secured hereby in any order or at the same time.
6.3.2. The Trustor agrees, to the full extent that it may lawfully do so,
that in any foreclosure or other action brought by the Beneficiary to enforce
this Trust Deed, it will not at any time insist upon or plead or in any way take
advantage of any appraisement, valuation, stay, marshalling of assets,
extension, redemption or moratorium law now or hereafter in force and effect so
as to prevent, hinder, delay or otherwise affect the enforcement of the
provisions of this Trust Deed or any rights or remedies the Beneficiary may have
hereunder or by law.
6.3.3. If the Beneficiary shall elect to accelerate the indebtedness
secured hereby following the occurrence of an Event of Default, the Trustor,
within five (5) days after demand, will pay to the Beneficiary, or any receiver
appointed in connection with the foreclosure of this Trust Deed, any and all
amounts then held as security deposits under all Space Leases; and the
Beneficiary or such receiver shall be deemed to indemnify the Trustor against
all claims of tenants in respect of the security deposits so paid following such
demand.
6.4. Legal Expenses of the Beneficiary.
6.4.1. The Trustor will pay to the Beneficiary or the Trustee, as the case
may be, on demand, all costs, charges and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) incurred or paid at
any time by the Beneficiary or the Trustee (i) in connection with any action or
proceeding to foreclose this Trust Deed or to recover or collect all, or any
portion of the indebtedness secured hereby; and (ii) in connection with any
modification or amendment or assignment of this Trust Deed or the other Security
Documents, together with interest on each such payment made by the Beneficiary
at the Involuntary Rate from the date of the Beneficiary's demand for such
payment to the date of reimbursement by the Trustor.
6.4.2. If any action or proceeding be commenced in which the Beneficiary or
the Trustee is made a
- 44 -
FRK11626.A05
285741572
01/09/97 KDF:
party, or in which it becomes necessary to defend or uphold the lien of this
Trust Deed, all reasonable sums paid by the Beneficiary for the expense of any
litigation to prosecute or defend the title, rights and lien created by this
Trust Deed (including, without limitation, reasonable attorneys' fees) shall be
paid by the Trustor, together with interest thereon at the Involuntary Rate from
the date of the Beneficiary's demand for such payment to the date of
reimbursement by the Trustor.
6.5. Remedies Cumulative; No Waiver; Etc.
6.5.1. No remedy in this Trust Deed conferred upon or reserved to the
Beneficiary is intended to be exclusive of any other remedy or remedies, and
each and every such remedy shall be cumulative, and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity. No delay or omission by the Beneficiary in exercising any right or power
arising upon any Event of Default shall impair any such right or power, or shall
be construed to be a waiver of or acquiescence in any such Event of Default; and
every power and remedy given by this Trust Deed to the Beneficiary may be
exercised from time to time as often as the Beneficiary may determine it is
appropriate to do so.
6.5.2. A waiver in one or more instances of compliance with any of the
terms, covenants, conditions or provisions of the Note, the Loan Agreement or of
the Security Documents shall apply to the particular instance or instances and
at the particular time or times only, and no such waiver shall be deemed a
continuing waiver. In any event, no waiver shall be effective, or be asserted by
the Trustor as having been made, unless set forth in a writing signed by the
Beneficiary.
6.5.3. The Trustor waives and renounces all homestead and similar exemption
rights with respect to the Mortgaged Premises provided for by the Constitution
and laws of the United States and of the State as against the collection of the
Security Documents, or any part thereof.
6.6. No Merger. It is the intention of the parties to this Trust Deed that
if the Beneficiary or the Trustee shall at any time hereafter acquire title to
all or any portion of the Mortgaged Premises, then, and until the indebtedness
secured hereby has been paid in full, the interest of the Beneficiary hereunder
and the lien of this Trust Deed shall not merge or become merged in or with the
estate and interest of the Beneficiary or the Trustee as the
- 45 -
FRK11626.A05
285741572
01/09/97 KDF:
holder and owner of title to all or any portion of the Mortgaged Premises and
that, until such payment, the estate of the Beneficiary or the Trustee in the
Mortgaged Premises and the lien of this Trust Deed and the interest of the
Beneficiary hereunder shall continue in full force and effect to the same extent
as if the Beneficiary or the Trustee had not acquired title to all or any
portion of the Mortgaged Premises.
ARTICLE VII.
Provisions of General Application
7.1. Modifications. No change, amendment, termination, modification or
cancellation of this Trust Deed, or of any part hereof, shall be valid unless
set forth in a writing signed by the Trustor and the Beneficiary, except that
only the Beneficiary need sign any satisfaction of this Trust Deed.
7.2. Notices. All notices, demands, requests, consents, approvals or other
communications (each, a "Notice") given or required to be given hereunder shall
be sent to the addresses and in the manner required by the Loan Agreement.
7.3. The Beneficiary's Rights to Perform the Trustor's Covenants. If the
Trustor shall fail to pay or cause payment to be paid to the Beneficiary in
accordance with the terms of the Security Documents, or to perform or observe
any other term, covenant, condition or obligation required to be performed or
observed by the Trustor under this Trust Deed or the other Security Documents,
without limiting any other provision of this Trust Deed, and without waiving or
releasing the Trustor from any obligation or default hereunder, after giving any
notice to the Trustor required hereunder and after the passage of any applicable
cure periods (or without such notice in the event of an emergency), the
Beneficiary (or any receiver of the Mortgaged Premises) shall have the right,
but not the obligation, to make any such payment, or to perform any other act or
take any appropriate action, including, without limitation, entry on the
Mortgaged Premises and performance of work thereat, as it, in its sole
discretion, may deem necessary to cause such other term, covenant, condition or
obligation to be promptly performed or observed on behalf of the Trustor or to
protect the security of this Trust Deed. All amounts advanced by, or on behalf
of, the Beneficiary in
- 46 -
FRK11626.A05
285741572
01/09/97 KDF:
exercising its rights under this SECTION 7.3 (including, but not limited to,
legal expenses and disbursements incurred in connection therewith), together
with interest thereon at the Involuntary Rate from the date of the Beneficiary's
demand upon the Trustor for reimbursement of such sums until reimbursement by
the Trustor, shall be payable by the Trustor to the Beneficiary upon demand and
shall be secured by this Trust Deed.
7.4. Additional Sums Payable by the Trustor. All sums which, by the terms
of this Trust Deed or any of the other Security Documents (excluding however the
principal indebtedness evidenced by the Note), are payable by the Trustor to the
Beneficiary shall, together with the interest thereon provided for herein or in
the Note or such other Security Documents, be added to and deemed part of the
indebtedness secured by the lien of this Trust Deed whether or not the provision
which obligates the Trustor to make any such payment to the Beneficiary
specifically so states.
7.5. Captions. The captions used in this Trust Deed are inserted only as a
matter of convenience and for reference, and in no way define, limit, enlarge or
describe the scope or intent of this Trust Deed or in any other way affect this
Trust Deed or the construction of any provision hereof.
7.6. Successors and Assigns. The covenants and agreements contained in this
Trust Deed shall run with the land and bind the Trustor, the successors and
assigns of the Trustor and all subsequent owners, encumbrances and Space Tenants
of the Mortgaged Premises, or any part thereof; and shall inure to the benefit
of the Beneficiary, its successors and assigns and all subsequent beneficial
owners of this Trust Deed.
7.7. Gender and Number. Wherever the context of this Trust Deed so
requires, the neuter gender includes the masculine and/or feminine gender and
the singular number includes the plural.
7.8. Severability. If any one or more of the provisions contained in this
Trust Deed shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Trust Deed; and this Trust Deed shall, in such
event, be construed as if such invalid, illegal or unenforceable provision had
never been included.
- 47 -
FRK11626.A05
285741572
01/09/97 KDF:
7.9. Usury. Anything in the Note, the Loan Agreement, this Trust Deed or
the other Security Documents to the contrary notwithstanding, the Beneficiary
shall never be entitled to receive, collect or apply as interest on the
principal amount of the Note or any other of the obligations secured hereby any
amount in excess of the maximum rate of interest permitted to be charged by
applicable law. In the event the Beneficiary ever receives, collects or applies
as interest any such excess, the amount which would be excessive interest shall
be applied to the reduction of the principal amount of said obligations; and if
said principal amount shall have been paid in full, shall be remitted to the
Person lawfully entitled thereto. In determining whether or not the interest
paid or payable in any specific instance shall exceed the highest lawful rate,
the Trustor and the Beneficiary shall to the maximum extent permitted by
applicable law (i) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof and (iii) "spread" the total amount of interest throughout the
entire contemplated terms of the obligations so that the interest rate is
uniform throughout the entire said term.
7.10. Controlling Law. This Trust Deed shall be governed by, and construed
and enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be wholly performed within such state.
7.11. Entire Agreement. This Trust Deed, together with the Note, the Loan
Agreement and the other Security Documents, embodies the entire agreement and
understanding between the parties relating to the subject matter hereof.
ARTICLE VIII.
Particular Provisions
The foregoing ARTICLES of this Trust Deed are subject to the following
further provisions set forth in this ARTICLE VIII.
8.1. Limited Recourse. The provisions of PARAGRAPH 6.16 of the Loan
Agreement are hereby incorporated herein by reference.
8.2. Environmental Representations and Warranties. The Trustor hereby makes
the following
- 48 -
FRK11626.A05
285741572
01/09/97 KDF:
representations and warranties to the Beneficiary with respect to the Mortgaged
Premises:
8.2.1. Compliance with Environmental Laws. To the best of the Trustor's
knowledge based on all appropriate and thorough inquiry, (i) the Mortgaged
Premises (including surface and subsurface soil and water and areas leased to
tenants, if any), and the use and operation thereof, have been and are currently
in compliance with all Environmental Laws (as hereinafter defined), (ii) all
required permits are in effect, and the Trustor is in compliance therewith, and
(iii) all Hazardous Materials (as hereinafter defined) generated or handled on
the Mortgaged Premises have been disposed of in a lawful manner.
8.2.2. No Hazardous Materials. To the best of the Trustor's knowledge based
on all appropriate and thorough inquiry (a) no Hazardous Release (as hereinafter
defined) or other Hazardous Activity (as hereinafter defined) has occurred or is
occurring on or from the Mortgaged Premises except in compliance with
Environmental Laws and as has been disclosed in writing to the Beneficiary
("Disclosed Material"), (b) all Hazardous Materials used, treated, stored,
transported to or from, generated or handled on the Mortgaged Premises have been
disposed of on or off the Mortgaged Premises in a lawful manner, (c) no
environmental or public health or safety hazards currently exist with respect to
the Mortgaged Premises or the business or operations conducted thereon, (d) no
underground storage tanks (including but not limited to petroleum or heating oil
storage tanks) are present on or under the Mortgaged Premises or have been on or
under the Mortgaged Premises, except as has been disclosed in writing to the
Beneficiary, and (e) no changes have been made to or discovered regarding the
operations, use or environmental conditions on the Mortgaged Premises since the
date of the most recent written environmental assessment provided to the
Beneficiary.
8.2.3. No Environmental Actions. To the best of the Trustor's knowledge and
based on all appropriate and thorough inquiry, the Mortgaged Premises is not
listed on any local, state and/or federal lists of potentially contaminated
sites, including, but not limited to, the National Priorities List,
Comprehensive Environmental Response, Compensation and Liability Information
System or any state or federal hazardous waste site or leaking underground
storage tank lists, and there have been no past and there are no pending or
threatened Environmental Actions (as hereinafter defined) to which the Trustor
is a party or which relate to the Mortgaged Premises. The Trustor has not
- 49 -
FRK11626.A05
285741572
01/09/97 KDF:
received any notice of any Environmental Action respecting the Trustor, the
Mortgaged Premises or any off-site facility to which has been sent any Hazardous
Material for purposes of any Hazardous Activity.
8.2.4. Intentionally Deleted.
8.2.5. Definitions. For purposes of this Trust Deed, the following
capitalized terms shall have the meanings set forth below:
"Environmental Action" shall mean:
(a) any notice of violation, complaint, claim, citation, demand,
inquiry, report, action, assertion of potential responsibility, lien,
encumbrance, or proceeding regarding the Mortgaged Premises, whether formal
or informal, absolute or contingent, matured or unmatured, brought or
issued by any governmental unit, agency, or body, or any person or entity
respecting:
(1) any Environmental Law;
(2) the environmental condition of the Mortgaged Premises, or any
portion thereof, or any property near the Mortgaged Premises,
including actual or alleged damage or injury to humans, public health,
wildlife, biota, air, surface or subsurface soil or water, or other
natural resources; or
(3) any Hazardous Activity on the Mortgaged Premises or off-site;
(b) any violation or claim of violation by the Trustor of any
Environmental Law whether or not involving the Mortgaged Premises;
(c) any lien for damages caused by, or the recovery of any costs
incurred by any person or entity, including any governmental entity, for
the investigation, remediation or cleanup of any Hazardous Release or
threatened Hazardous Release on the Mortgaged Premises; or
(d) the destruction or loss of use of property, or the injury, illness
or death of any officer, director, employee, agent, representative, tenant
or invitee of the Trustor or any other person alleged to be or possibly to
be arising from or caused by the environmental condition of the Mortgaged
Premises or any Hazardous Activity on the Mortgaged Premises.
- 50 -
FRK11626.A05
285741572
01/09/97 KDF:
"Environmental Laws" shall mean:
(a) any present or future federal statute, law, code, rule,
regulation, ordinance, order, standard, permit, license, guidance document
or requirement (including consent decrees, judicial decisions and
administrative orders) together with all related amendments, implementing
regulations and reauthorizations, pertaining to the protection,
preservation, conservation or regulation of the environment, including, but
not limited to: the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. Sections 9601 et seq. ("CERCLA"); the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et
seq. ("RCRA"); the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et
seq. ("TOSCA"); the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; the
Clean Water Act, 33 U.S.C. Sections 1251 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq. ("HMTA"); the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11011 et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections
136 et seq.; and the Atomic Energy Act, 42 U.S.C. Sections 2011 et seq.
(b) any present or future state or local statute, law, code, rule,
regulation, ordinance, order, standard, permit, license or requirement
(including consent decrees, judicial decisions and administrative orders)
together with all related amendments, implementing regulations and
reauthorizations, pertaining to the protection, preservation, conservation
or regulation of the environment.
"Hazardous Activity" shall mean any use, exposure, Hazardous Release,
generation, manufacture, sale, transport, handling, storage, treatment,
reuse, presence, decontamination, clean-up or recycling of any Hazardous
Material.
"Hazardous Materials" shall mean (a) all substances defined as
"hazardous substances", "hazardous materials", "toxic substances",
"hazardous wastes" or "solid waste" in CERCLA, RCRA, TOSCA or HMTA; (b)
those substances listed in the United States Department of Transportation
Table (49 C.F.R. 172.101 and amendments thereto) or by the Environmental
Protection Agency (or any successor agency) as "hazardous substances" (40
C.F.R. Part 302 and amendments thereto); those substances defined as
"hazardous wastes" or as "hazardous substances" in the regulations adopted
and publications promulgated pursuant to said laws or which
- 51 -
FRK11626.A05
285741572
01/09/97 KDF:
otherwise are or become regulated by any governmental authority, agency,
department, commission, board or instrumentality of the United States of
America, the State of Texas or any political subdivision thereof; (d) any
hazardous, dangerous or toxic chemical, material, waste, pollutant,
contaminant or substance (collectively, "Pollutants") within the meaning of
any Environmental Law prohibiting, limiting or otherwise regulating any
Hazardous Activity relating to any such Pollutant; (e) any petroleum, crude
oil, or fraction or by-product thereof; (f) any radioactive material,
including any source, special nuclear or by-product material as defined at
42 U.S.C. Sections 2011 et seq., as amended or hereafter amended, and in
the regulations adopted and publications promulgated pursuant to said law;
(g) asbestos-containing materials in any form or condition; and (h)
polychlorinated biphenyls in any form or condition.
"Hazardous Release" shall mean the release of Hazardous Materials into
the environment by any means whatsoever, including but not limited to any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping removing or disposing (including the
abandonment or discarding of barrels, containers and other receptacles
containing any Hazardous Material).
ARTICLE IX.
Trustee
9.1. The Trustee.
9.1.1. The powers of the Trustee may be exercised by any one Trustee,
acting singly, or by any successor Trustee, and in the event either Trustee
shall act alone, the authority and power of the Trustee so acting shall be as
full and complete as if the powers and authority granted to the Trustee herein
jointly had been granted to such Trustee alone; and either or both of the
Trustee are hereby authorized to act by agent or attorney in the execution of
this Trust Deed. The Trustor hereby grants to the Beneficiary, in its sole
discretion, the right and power, at any time and from time to time hereafter,
without notice, to appoint a substitute trustee or trustees for any reason
whatsoever. Upon such appointment, either with or without a conveyance to said
substituted trustee or trustees by the Trustee herein named, or by any
substituted trustee in case such right of appointment is exercised more than
- 52 -
FRK11626.A05
285741572
01/09/97 KDF:
once, the new and substituted trustee or trustees in each instance shall be
vested with all the rights, titles, interests, powers, duties and trusts in the
Mortgaged Premises which are vested in and conferred upon the Trustee herein
named, and such new and substituted trustee or trustees shall be considered the
successors and assigns of the Trustee who is named herein within the meaning of
this instrument, and substituted in their name and xxxxx. Such substitution
shall be made by an instrument duly executed by anyone acting in a
representative capacity, which instrument, upon execution shall be conclusive
proof of the proper substitution and appointment of such successor trustee or
trustees, the authority of the person executing such instrument, and notice of
such proper substitution and appointment to all parties in interest.
9.1.2. The Trustor shall pay the Trustee just compensation for any and all
services performed (based upon time spent) and all of the Trustee's expenses,
charges, reasonable attorneys' fees and other Obligations incurred in the
administration and execution of the trusts hereby created and the performance of
their duties and powers hereunder, which compensation, expenses, fees and
disbursements shall constitute a part of the obligations secured hereby. Without
limiting the generality of the foregoing, in the event that foreclosure
proceedings are instituted hereunder but not completed, the Trustee shall be
reimbursed for all costs and expenses incurred by them in commencing such
proceedings; and all costs and expenses incurred by the Trustee, and such
commission, together with interest thereon until paid at the Default Rate, shall
be payable by the Trustor on demand, and shall be and become a part of the
Obligations and shall be collectible as such.
9.1.3. The Trustee shall not be liable for any error of judgment or act
done by the Trustee in good faith, or be otherwise responsible or accountable
under any circumstances whatsoever, except due to the Trustee's gross negligence
or willful misconduct. The Trustee shall have the right to rely on any
instrument, document or signature authorizing or supporting any action taken or
proposed to be taken by them hereunder, believed by the Trustee in good faith to
be genuine. All money received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated in any manner from any other money (except to the
extent required by law or under the Security Documents), and the Trustee shall
be under no liability for interest on any money received by them hereunder.
- 53 -
FRK11626.A05
285741572
01/09/97 KDF:
9.1.4. The Trustee, at any time, upon request of the Beneficiary, may
reconvey to the Trustor or the Trustor's successors or assigns, any portion of
the Mortgaged Premises without affecting the personal liability of any person
for the payment of any said indebtedness, or the lien of this Trust Deed upon
the remainder of the Mortgaged Premises not reconveyed.
9.1.5. The Trustor forthwith upon request, at any and all times hereafter,
at the expense of the Trustor, will cause to be made, executed, acknowledged and
delivered to the Trustee, any and every deed or assurance in law which the
Trustee or counsel of the Trustee shall reasonably require for the more sure,
effectual and satisfactory granting and confirming of the Mortgaged Premises
unto the Trustee.
- 54 -
FRK11626.A05
285741572
01/09/97 KDF:
IN WITNESS WHEREOF, the Trustor has executed this Trust Deed as of the day
and year first above written.
"Trustor"
CORPORATE REALTY INCOME
FUND I, L.P., a Delaware
limited partnership
By: _______________________
Xxxxxx X. Xxxxxxx, Xx.,
general partner
By: 1345 Realty Corporation,
general partner
By: _______________________
Xxxxxx X. Xxxxxxx, Xx.,
President
- 55 -
FRK11626.A05
285741572
01/09/97 KDF:
State of _____________________ )
County of ____________________ )
On ________________ before me, ________________________________________________
Date
_______________________________________________________________________________,
NAME, TITLE OF OFFICER-E.G., "XXXX XXX, NOTARY PUBLIC"
personally appeared ___________________________________________________________
NAME(S) OF SIGNER(S)
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature_______________________________ (Seal)
- 56 -
FRK11626.A05
285741572
01/09/97 KDF:
EXHIBIT A
PREMISES
LEGAL DESCRIPTION
BEING all of Walnut Hill Business Park Fourth Installment, an Addition to the
City of Irving, Dallas County, Texas, according to the Map thereof recorded in
Volume 79068, Page 1713 of the Map Records of Dallas County, Texas and being
more particularly described as follows:
BEGINNING at a 1/2 inch iron rod found for corner at the intersection of the
West right-of-way line of Executive Drive (60' R.O.W.) and the South
right-of-way line of Greenway Drive (60' R.O.W.);
THENCE South 00 degrees 06 minutes 20 seconds West along the West right-of-way
line of Executive Drive, a distance of 725.00 feet to a 1/2 inch iron rod found
for corner at the intersection of the West Line of said North right of-way line
of Corporate Drive (60' R.O.W.);
THENCE North 89 degrees 53 minutes 40 seconds West along the North right-of-way
line of Corporate Drive, a distance of 400.00 feet to a 1/2 inch iron rod found
for corner;
THENCE North 00 degrees 06 minutes 20 seconds East departing the said North line
of Corporate Drive, a distance of 725.00 feet to a 1/2 inch iron rod set for
corner in the South right-of-way line of Greenway Drive;
THENCE South 89 degrees 53 minutes 40 seconds East along the South right-of-way
line of Greenway Drive, a distance of 400.00 feet to the POINT OF BEGINNING and
CONTAINING 290,000 square feet or 6.657 acre
- 57 -
FRK11626.A05
285741572
01/09/97 KDF:
